If the Expected Rate of Inflation Was 3% and the Actual

question 32

Multiple Choice

If the expected rate of inflation was 3% and the actual rate was 6.2%; the systematic response coefficient from inflation, $\beta$ _I, would result in a change in any security return of ___ $\beta$ _I.

• A)9.2
• B)3.2
• C)-3.2
• D)3.0
• E)6.2

---

Definitions:

Type II Error

The error that occurs when the null hypothesis is not rejected when it is actually false, also known as a false negative result.

Type I Error

Mistakenly refusing a true null hypothesis, popularly known as a "false positive."

Nominal Data

Data that are categorized into distinct groups without implying any ranked order among them.

Confidence Level

The probability, expressed as a percentage, that the result of an experiment or study will fall within a specified range of values.