TABLE 13-9 It Is Believed That, the Average Numbers of Hours Spent

question 83

Multiple Choice

TABLE 13-9
It is believed that, the average numbers of hours spent studying per day (HOURS) during undergraduate education should have a positive linear relationship with the starting salary (SALARY, measured in thousands of dollars per month) after graduation. Given below is the Excel output for predicting starting salary (Y) using number of hours spent studying per day (X) for a sample of 51 students. NOTE: Only partial output is shown.

Note: 2.051E - 05 = 2.051*10⁻⁰⁵ and 5.944E - 18 = 5.944*10⁻¹⁸.
-Referring to Table 13-9, the 90% confidence interval for the average change in SALARY (in thousands of dollars) as a result of spending an extra hour per day studying is

• A) wider than [-2.70159, -1.08654].
• B) narrower than [-2.70159, -1.08654].
• C) wider than [0.8321927, 1.12697].
• D) narrower than [0.8321927, 1.12697].

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Definitions:

Modified Duration

A measure indicating the sensitivity of a bond's price to changes in interest rates, estimating the percentage price change for a parallel shift in yield curves.

Yield

The income return on an investment, such as the interest or dividends received, expressed as an annual percentage of the investment's cost.

Market Efficiency

A concept that describes the degree to which stock prices and other securities' prices reflect all available, relevant information.

Portfolio Manager

A professional responsible for making investment decisions and carrying out investment activities on behalf of vested interests.