90. (Project 2) Which of the assumptions in Project 2 allows you to assume that the mean of the errors is
zero?
(A) The same companies will all bid in the auction, and they will be the only bidders for the tracts.
(B) The geologists employed by each of the bidding companies are all equally expert and, on
average, they can estimate the correct values of leases.
(C) Except for their means, the distributions of the signal values are all identical.
(D) All of the companies act in their own best interests, have the same profit margins, and have the
same needs for business. Thus, the fair value of a lease is the same for all companies.
Data representing the errors from four prior auctions involving four companies are provided in the table
below.
Error 1 Error 2 Error 3 Error 4
Auction 1 $11.60 -$4.60 $7.30 $2.10
Auction 2 $13.70 $2.50 -$12.60 -$4.30
Auction 3 $2.60 $9.80 -$3.60 $4.40
Auction 4 -$7.90 $3.60 $6.10 -$15.20
Use the data in the table to answer questions 91 and 92.
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