Suppose 30% of a Population Possess a Given Characteristic

question 40

Multiple Choice

Suppose 30% of a population possess a given characteristic.If a random sample of size 1200 is drawn from the population, then the probability that less than 348 possess that characteristic is ___.

• A)0.2236
• B)0.2764
• C)0.2900
• D)0.7764
• E)0.3336

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Definitions:

Risk Premium

An expected return in excess of that on risk-free securities. The premium provides compensation for the risk of an investment.

Market Portfolio

An investment portfolio that theoretically includes all assets in the market, with each asset weighted according to its market capitalization.

Expected Return-Beta Relationship

A concept in the Capital Asset Pricing Model (CAPM), indicating that the expected return on an investment is related to its beta, which measures the investment's volatility relative to the market.

CAPM

Capital Asset Pricing Model, a financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.