For Questions Use the Following Narrative

question 11

Essay

For Questions use the following narrative
Narrative: Toy colors
Suppose a toy company wants to know if certain colors are more appealing and attractive to toddlers than others.They decide to measure this by choosing five colors of blocks and making sets of blocks in each of the five colors.Then they found 30 toddlers to participate in the study, and they randomly assigned each toddler a block color.They observed each toddler separately at the same time of the day, and gave them no other toys to play with.They recorded the length of time each toddler played with the blocks, to see if some colors of blocks were played with longer than other colors.All toddlers in the experiment were the same age (2 years old) and an equal number of girls and boys played with each color of blocks.
-{Toy colors narrative} What is the explanatory variable and what is the response variable?

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Definitions:

Alpha

Alpha is a measure used in finance to describe an investment strategy's ability to beat the market, or its "excess return" relative to the return of the benchmark index.

Index Model

A model of stock returns using a market index such as the S&P 500 to represent common or systematic risk factors.

Covariance

A measure indicating the relationship between two variables and how they move together or apart from each other, used in finance to measure how the returns of two securities are related.

Factor Model

A way of decomposing the factors that influence a security’s rate of return into common (systematic) and firm-specific influences.