Stocks X and Y Have the Following Data $\mathrm{X}$

question 5

Multiple Choice

Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT?

• A) Stock Y pays a higher dividend per share than Stock X.
• B) Stock X payg a higher dividend per ghare than stock Y.
• C) One year from now, Stock \( \mathrm{X} \) should have the higher price.
• D) Stock \( Y \) has a lower expected growth rate than Stock X.
• E) Stock \( Y \) has the higher expected capital gains yield.

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Definitions:

Sampling Distributions

The probability distribution of a statistic obtained from a large number of samples drawn from a specific population.

Statistical Significance

A measure of how likely it is that obtained results are not due to chance, often determined by a p-value.

Systematic Variance

The portion of total variance in a set of data that is attributable to identifiable factors or variables, as opposed to random variance.

Group Means

The average values obtained from different samples or sets of data, representing the central tendency of each group.