An Issue That Faces Individuals Investing for Retirement Is Allocating

question 92

Multiple Choice

An issue that faces individuals investing for retirement is allocating assets among different investment choices.Suppose a study conducted 10 years ago showed that 65% of investors preferred stocks to real estate as an investment.In a recent random sample of 900 investors,540 preferred real estate to stocks.Is this new data sufficient to allow you to conclude that the proportion of investors preferring stocks to real estate has declined from 10 years ago? Conduct your analysis at the α = 0.02 level of significance.

• A)Because z = -1.915 is not less than -2.055,do not reject H₀.A higher proportion of investors prefer stocks today than 10 years ago.
• B)Because z = -1.915 is not less than -2.055,do not reject H₀.A lower proportion of investors prefer stocks today than 10 years ago.
• C)Because z = -3.145 is less than -2.055,reject H₀.A lower proportion of investors prefer stocks today than 10 years ago.
• D)Because z = -3.145 is less than -2.055,reject H₀.A higher proportion of investors prefer stocks today than 10 years ago.

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Definitions:

Asch's Studies

A series of psychological experiments conducted by Solomon Asch, demonstrating the power of conformity in groups.

Perceptual Distortion

A psychological phenomenon involving an alteration of perception, where the sensed reality of an environment is different from its objective reality.

Judgment

The ability to make considered decisions or come to sensible conclusions.

Obedience

The act of following orders or directives from authority figures, often studied in psychology in terms of social influence and authority.