If the Absolute Value of Your Calculated T-Statistic Exceeds the Critical

question 34

Multiple Choice

If the absolute value of your calculated t-statistic exceeds the critical value from the standard normal distribution, you can

• A)reject the null hypothesis.
• B)safely assume that your regression results are significant.
• C)reject the assumption that the error terms are homoskedastic.
• D)conclude that most of the actual values are very close to the regression line.

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Definitions:

Risky Asset

An asset that carries a significant degree of risk of losing all or part of its value.

Total Risk

The complete spectrum of risks associated with an investment, including both systematic and unsystematic risks.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, widely used in statistics to quantify the uncertainty or risk.

Diversifiable Risk

A type of risk that can be reduced or eliminated from a portfolio through the process of diversification, as it's not correlated to market risk.