SCENARIO 13-7 an Investment Specialist Claims That If One Holds

question 92

Multiple Choice

SCENARIO 13-7 An investment specialist claims that if one holds a portfolio that moves in the opposite direction to the market index like the 500, then it is possible to reduce the variability of the portfolio's return.In other words, one can create a portfolio with positive returns but less exposure to risk. A sample of 26 years of S&P 500 i ndex and a portfolio consisting of stocks of private prisons, which are believed to be negatively related to the S&P 500 inde x, is collected.A regression analysis was performed by regressing the returns of the prison stocks portfolio (Y) on the returns of S&P 500 index ( X) to prove that the prison stocks portfolio is negatively related to the S&P 500 index at a 5% level of significance.The results are given in the following EXCEL output.
-Referring to Scenario 13-7, to test whether the prison stocks portfolio is negatively related to the S&P 500 index, the appropr iate null and alternative hypotheses are, respectively,

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Definitions:

Receivables

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Favorable Lending

Financial conditions or loan terms that are advantageous to the borrower, such as lower interest rates or flexible repayment schedules.

Loan Officer

A financial professional responsible for evaluating, authorizing, or recommending approval of loan applications for people and businesses.

Entrepreneur's Ability

The set of skills, knowledge, and competencies that enable an individual to innovate, start, and successfully manage business ventures.