In the context of statistics, what is the key factor in establishing apparent authority?

• A. The sample size used in the analysis
• B. The statistical significance of the data
• C. The perception of authority by third parties
• D. The actual written agreement between parties

Answer: (C)

Verified step by step guidance

1. Understand the concept of 'apparent authority' in statistics and business. Apparent authority refers to the perception by third parties that an individual has the authority to act on behalf of an organization, regardless of whether this authority is formally granted.
2. Recognize that apparent authority is not directly tied to statistical measures such as sample size or statistical significance. These are quantitative tools used in data analysis, not factors influencing perceptions of authority.
3. Identify the key factor in establishing apparent authority: it is the perception of authority by third parties. This perception is shaped by how the individual presents themselves and how their actions are interpreted by others.
4. Clarify that the actual written agreement between parties is not the determining factor for apparent authority. While formal agreements establish legal authority, apparent authority is based on external perceptions rather than internal documentation.
5. Conclude that apparent authority is a qualitative concept rooted in human perception and behavior, making it distinct from quantitative statistical measures or formal agreements.