A Financial Analyst Is Presented with Information on the Past

question 390

Multiple Choice

A financial analyst is presented with information on the past records of 60 start-up companies and told that in fact only 3 of them have managed to become highly successful. He selected 3
Companies from this group as the candidates for success. To analyze his ability to spot the
Companies that will eventually become highly successful, he will use what type of probability
Distribution?

• A) binomial distribution.
• B) Poisson distribution.
• C) hypergeometric distribution.
• D) none of the above.

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Definitions:

Level Of Significance

A threshold in hypothesis testing that determines the probability of rejecting the null hypothesis when it is true.

Treatments

Interventions or procedures used to try to improve health, address a disease, or evaluate their effectiveness.

Block Design

a type of experimental design where units are grouped into blocks, each block contains all the treatments.

Spearman's Rank Correlation

A non-parametric measure of rank correlation that assesses how well the relationship between two variables can be described using a monotonic function.