Question

Suppose that a home mortgage company has N mortgages numbered serially in the order that they were granted over a period of 20 years. There is a generally increasing trend in the unpaid balances because of the rising cost of housing over the years. The company wishes to estimate the total amount of unpaid balances. Would you employ a systematic or simple random sample

Answer 1

A systematic sample

Explanation:

since there is an increasing trend in the unpaid balances because of the rising cost of housing the best approach is A systematic sample.

A systematic sample is preferred because it will capture the individual debts over the period of 20 years (i.e. the whole 20 years of mortgages ) while a simple random sample will just capture a certain period and its result will not represent the true nature of indebtedness .