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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