Instruction 12 -Referring to Instruction 12

question 170

Multiple Choice

Instruction 12.31
An investment specialist claims that if one holds a portfolio that moves in opposite direction to the market index like the All Ordinaries Index, then it is possible to reduce the variability of the portfolio's return. In other words, one can create a portfolio with positive returns but less exposure to risk. A sample of 26 years of the All Ordinaries index and a portfolio consisting of stocks of private prisons, which are believed to be negatively related to the All Ordinaries index, is collected. A regression analysis was performed by regressing the returns of the prison stocks portfolio (Y) on the returns of All Ordinaries index (X) to prove that the prison stocks portfolio is negatively related to the All Ordinaries index at a 5% level of significance. The results are given in the following Microsoft Excel output.
$$\begin{array} { | l | l | l | l | l | } \hline & \text { Coefflelents } & \text { Standard Error } & \text { tStat } & p \text {-vahse } \\\hline \text { Intercept } & 4.866004258 & 0.35743609 & 13.61363441 & 8.7932 \mathrm { E } - 13 \\\hline \text { S\&P } & - 0.502513506 & 0.071597152 & - 7.01862425 & 2.94942 \mathrm { E } - 07 \\\hline\end{array}$$
-Referring to Instruction 12.31,which of the following will be a correct conclusion?

• A) You cannot reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and All Ordinaries index are negatively related.
• B) You can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and All Ordinaries index are negatively related.
• C) You can reject the null hypothesis and conclude that there is not sufficient evidence to show that the prisons stock portfolio and All Ordinaries index are negatively related.
• D) You cannot reject the null hypothesis and, therefore, conclude that there is not sufficient evidence to show that the prisons stock portfolio and All Ordinaries index are negatively related.

---

Definitions:

Day Care Center

A facility that provides care and supervision for children or dependent adults during the day, often including educational and recreational activities.

Occupational Health Nurse

A registered nurse specializing in caring for the health and wellbeing of workers, focusing on prevention, education, and injury/illness management in the workplace.

Priority Question

A query that is considered of utmost importance, requiring immediate attention or prompt response.

Facial Bruises

Discolorations and swelling on the face caused by injury or impact, which can indicate physical trauma or abuse.