If the Returns on Small-Company Stocks Are Normally Distributed, Which

question 281

Multiple Choice

If the returns on small-company stocks are normally distributed, which of the following returns would lie in a 99% confidence interval around the mean, but not in a 95% confidence interval?

• A) -30%
• B) -10%
• C) 50%
• D) 70%
• E) 90%

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Definitions:

Sample Size

The number of observations or data points in a study or experiment.

Null Hypothesis

A statement that assumes no relationship or difference between certain variables.

Type I Error

Type I Error occurs when a true null hypothesis is incorrectly rejected, often symbolized as the false positive rate in hypothesis testing.

Chance

The occurrence and development of events in the absence of any obvious intention or cause.