Suppose You Invest $15,000 in Merck Stock and $25,000 in Home

question 71

Multiple Choice

Suppose you invest $15,000 in Merck stock and $25,000 in Home Depot stock.You expect a return of 16% for Merck and 12% for Home Depot.What is the expected return on your portfolio?

• A)13.50%
• B)14.00%
• C)13.75%
• D)14.50%

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Definitions:

Standard Error

A statistical measure that describes the accuracy with which a sample represents a population, specifically the variability of sampling distributions.

Test Statistic

A calculated value used to make a decision regarding a hypothesis test; it measures the degree of agreement between a sample data and the null hypothesis.

Sample Proportion

The ratio of members in a statistical sample that have a particular attribute to the total number of members in the sample.

Null Hypothesis

The null hypothesis is a statement used in statistics that proposes there is no significant difference or effect, serving as the starting point for hypothesis testing.