SCENARIO 11-2 a Realtor Wants to Compare the Mean Sales-To-Appraisal Ratios of Ratios

question 203

Multiple Choice

SCENARIO 11-2
A realtor wants to compare the mean sales-to-appraisal ratios of residential properties sold in four neighborhoods (A,B,C,and D) .Four properties are randomly selected from each neighborhood and the ratios recorded for each,as shown below.
A: 1.2,1.1,0.9,0.4
C: 1.0,1.5,1.1,1.3
B: 2.5,2.1,1.9,1.6
D: 0.8,1.3,1.1,0.7
Interpret the results of the analysis summarized in the following table:
-Referring to Scenario 11-2,

• A)at the 0.05 level of significance,the mean ratios for the 4 neighborhoods are not all the same.
• B)at the 0.01 level of significance,the mean ratios for the 4 neighborhoods are all the same.
• C)at the 0.10 level of significance,the mean ratios for the 4 neighborhoods are not significantly different.
• D)at the 0.05 level of significance,the mean ratios for the 4 neighborhoods are not significantly different from 0.

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Definitions:

Treynor Measure

A performance metric that measures the returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk.

Standard Deviation

A measure of the dispersion or variability in a set of values, used to assess the risk associated with a particular security or investment portfolio.

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates the stock is more volatile than the market, while a beta below 1 indicates the stock is less volatile.

Nonlinear Factor Exposures

Nonlinear Factor Exposures refer to investment sensitivities to market factors that do not change in a straight-line (linear) relationship with the market's movements.