A manager of the credit department for an oil company would like to determine whether the mean monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the mean owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test whether the auditor should conclude that there is evidence that the mean balance is different from $75, which test would you use?
A) Z-test of a population mean
B) Z-test of a population proportion
C) t-test of a population mean
D) t-test of a population proportion

Question

Quizplus · Accepted Answer

Since the population standard deviation is not known, we need to use a t-test of a population mean. The sample size is also greater than 30, which satisfies the central limit theorem for sample means. Therefore, a t-test is the best choice in this scenario.

A Manager of the Credit Department for an Oil Company