In the Equation R = E(R) + U, the Three

question 15

Multiple Choice

In the equation R = E(R) + U, the three symbols stand for:

• A)average return, expected return, and unexpected return.
• B)required return, expected return, and unbiased return.
• C)actual total return, expected return, and unexpected return.
• D)required return, expected return, and unbiased risk.
• E)risk, expected return, and unsystematic risk.

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Definitions:

Standard Deviation

Indicates how dispersed the values in a data set are, relative to the mean of the set.

Chi-Square Values

Statistical measures used in hypothesis testing, especially to determine whether categorical variables are independent.

Interval Estimation

A range of values, calculated from sample data, that is likely to contain the value of an unknown population parameter.

Test Statistic

A value, derived from sample data, used in hypothesis testing to determine whether to reject the null hypothesis.