Exhibit 11-5
the Table Below Gives Beverage Preferences for Random

question 77

Multiple Choice

Exhibit 11-5
The table below gives beverage preferences for random samples of teens and adults.
$\begin{array}{lrrr}&\text { Teens}&\text { Adults }&\text {Total }\\\text { Coffee } & 50 & 200 & 250 \\\text { Tea } & 100 & 150 & 250 \\\text { Soft Drink } & 200 & 200 & 400 \\\text { Other } & 50 & 50 & 100\\400&400&600&1,000\end{array}$ We are asked to test for independence between age i.e., adult and teen) and drink preferences.
-Refer to Exhibit 11-5. The expected number of adults who prefer coffee is

• A) 0.25
• B) 0.33
• C) 150
• D) 200

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Definitions:

SML Approach

A method used in finance to determine the expected return of an investment with respect to its risk, as represented by its beta.

Risk-Free Rate

The earnings from an investment that carries no possibility of losing money, usually linked to government-issued bonds.

Weighted Average Cost

A method used to calculate the average cost of a group of assets, taking into account the varying weights of each asset.

Systematic Risk

The type of risk inherent to the entire market or market segment, which cannot be mitigated or eliminated through diversification.