Your Investment Executive Claims That the Average Yearly Rate of Return

question 18

Multiple Choice

Your investment executive claims that the average yearly rate of return on the stocks she recommends is at least 10.0%. You plan on taking a sample to test her claim. The correct set of hypotheses is

• A)H₀: \(\mu\) < 10.0% H_a: \(\mu\) \(\ge\) 10.0%
• B)H₀: \(\mu\) \(\le\)10.0% H_a: \(\mu\) > 10.0%
• C)H₀: \(\mu\) > 10.0% H_a: \(\mu\) \(\le\) 10.0%
• D)H₀: \(\mu\) \(\ge\) 10.0% H_a: \(\mu\) < 10.0%

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Definitions:

Comparative Advantage

The knack of entities, whether they are people, companies, or countries, to bring forth goods or services at opportunity costs that undercut those of competitors.

Opportunity Costs

Opportunity Costs represent the benefits that are foregone by choosing one option over an alternative one.

Specialization

The focus by an individual, firm, or country on producing a limited range of goods or services, often to improve efficiency and productivity.