The Expected Rate of Return for 3COM Is 18%, with a Standard

question 40

Multiple Choice

The expected rate of return for 3COM is 18%, with a standard deviation of 10.98%. The expected rate of return for Just the Fax is 26%, with a standard deviation of 15.86%. Which firm would be considered the riskier from a total risk perspective?

• A) 3COM
• B) Just the Fax
• C) Neither, as both have the same risk
• D) Cannot be determined

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Definitions:

Null Hypothesis

A hypothesis in statistical analysis that proposes there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.

Groups

Sets of subjects or variables categorized together for analysis or study.

Null Hypothesis

A hypothesis that states there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.

Groups

In research, these refer to sets of subjects or items that have been separated based on characteristics or treatment conditions for analysis.