Under the Following Conditions,what Are the Expected Returns for Stocks

question 26

Multiple Choice

Under the following conditions,what are the expected returns for stocks X and Y?
$\begin{array}{ll}\lambda^{0}=0.05 & b_{x, 1}=0.90 \\k_{1}=0.03 & b_{x, 2}=1.60 \\k_{2}=0.04 & b_{\mathrm{y}, 1}=1.50 \\& b_{\mathrm{v}, 2}=0.85\end{array}$

• A) 14.1% and 12.9%
• B) 12.5% and 19.5%
• C) 19.5% and 18.5%
• D) 21.2% and 18.5%
• E) None of the above

---

Definitions:

F-ratio

The F-ratio is a statistic used to compare variances across groups, often in ANOVA, to test if the means of several groups are equal.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis, assuming the null hypothesis is true.

Critical Value

A threshold in hypothesis testing that defines the boundary or cutoff for deciding whether to reject the null hypothesis.

Null Hypothesis

A statistical hypothesis that suggests there is no effect or no difference, and it serves as the default position that there is no association between two measured phenomena.