A Financial Analyst Maintains That the Risk, Measured by the Variance

question 60

Multiple Choice

A financial analyst maintains that the risk, measured by the variance, of investing in emerging markets is more than 280(%) ². Data on 20 stocks from emerging markets revealed the following sample results: = 12.1% and s² = 361(%) ². Assume that the returns are normally distributed. Which of the following are appropriate hypotheses to test the analyst's claim?

• A) : ≤ 280, : > 280
• B) : = 280, : ≠ 280
• C) : ≥ 280, : < 280
• D) : < 280, : ≥ 280

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Definitions:

Lead Time

The duration between the initiation and completion of a process, like the time from placing an order to its delivery.

Review Interval

The predetermined period between assessments or analyses of processes, systems, or inventory levels.

Safety Inventory

Buffer stock maintained to guard against unforeseen spikes in demand or delays in supply, ensuring consistent service levels.

Aggregation

The process of combining multiple pieces of data or information to create a summary or composite view.