Imagine You Wish to Test 4 Independent Hypotheses So That

question 5

Multiple Choice

Imagine you wish to test 4 independent hypotheses so that the total type 1 error probability is 0.10.According to the Bonferroni method, each test should be conducted at what significance level?

• A)0.01
• B)0.025
• C)0.05
• D)0.10

---

Definitions:

Selection Within Markets

The strategy of selecting specific securities for investment within a particular market or sector to optimize returns.

Abnormal Return

Abnormal return is the difference between the actual return of a security and its expected return, based on risk and market performance, indicating performance indicative of events or conditions unique to that security.

Bonds

A type of fixed-income investment where an investor loans money to an entity (corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate.

Asset Allocation

The strategy of distributing investments among various classes of assets to manage risk and enhance returns.