When Alpha Is Smaller ______

question 38

Multiple Choice

When alpha is smaller ______.

• A) a larger sample size is required to reject the null
• B) a smaller sample size is required to reject the null
• C) beta is larger
• D) beta is smaller

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Definitions:

Exercise Price

The price stated in the option contract at which the security can be bought (or sold). Also called the strike price.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on management decisions.

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security at a predetermined price before a specific date.

Convertibles

Convertibles are bonds or preferred stocks that can be converted into a predetermined number of common stock or equity shares.