Which of the Following Statements Is Incorrect

question 4

Multiple Choice

Which of the following statements is incorrect?

• A)Market-makers take positions to capitalize on the discrepancy between the prevailing stock price and their own valuation of a stock.
• B)Specialists and market-makers may take the opposite position of uninformed investors and therefore stand to benefit if their expectations are correct.
• C)For each stock that is traded in the Nasdaq market, there are 50 market-makers on average.
• D)The spread quoted for a given stock may vary among market-makers.

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Definitions:

Pearson Correlation

A measure of the linear correlation between two variables, giving a value between -1 and 1 which indicates the direction and strength of the relationship.

Null Hypothesis

A statement used in statistics that suggests no effect or no difference; it is the hypothesis that researchers typically aim to nullify or disprove.

Precipitation

Any type of water, whether in liquid or solid state, that descends from the atmosphere, encompassing rain, snow, sleet, and hail.

Significance Level

The threshold below which a null hypothesis is rejected in statistical testing, typically denoted as alpha (α).