Over the Past 30 Years, the Sample Standard Deviations of the Rates

question 109

Multiple Choice

Over the past 30 years, the sample standard deviations of the rates of return for stock X and Stock Y were 0.20 and 0.12, respectively. The sample covariance between the returns of X and Y is 0.0096. To determine whether the correlation coefficient is significantly different from zero, the appropriate hypotheses are ________.

• A) H₀: μ = 0, H_A: μ ≠ 0
• B) H₀: ρ_xy = 0, H_A: ρ_xy ≠ 0
• C) H₀: μ = 1, H_A: μ ≠ 1
• D) H₀: ρ_xy = 1, H_A: ρ_xy ≠ 1

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input while holding all other inputs constant.

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A graphical representation of the relationship between the price of a good and the quantity demanded.

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Utilization of human physical and mental capabilities in the generation of goods and services.

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The significant global economic downturn that occurred from late 2007 through mid-2009, characterized by widespread financial crisis, high unemployment, and declines in the housing market.