Tamara Hill, Fund Manager of the Hill Value Fund, Manages $\alpha$

question 61

Multiple Choice

Tamara Hill, fund manager of the Hill Value Fund, manages a portfolio of 250 common stocks.Tamara is searching for a 'low risk' issue to add to the portfolio, i.e., one with a price variance less than that of the S&P 500 index.Moreover, she assumes an issue is not 'low risk' until demonstrated otherwise.Her staff reported that during the last nine quarters, the price variance for the S&P 500 index (population 1) was 25, and for the last seven quarters, the price variance for XYC common (population 2) was 8.Assume that stock prices are normally distributed in the population.Using $\alpha$ = 0.05, the observed F value is _______.

• A)3.13
• B)0.32
• C)1.77
• D)9.77
• E)9.87

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Definitions:

Marginal Costs

The added cost of producing one additional unit of production.

Units Produced

The total number of units of product that a company manufactures over a specified period.

Costs

An economic metric that considers the total expenditure of resources, including money, time, and labor, to achieve a particular goal or produce a good or service.

Allocation Method

A strategy or system used for distributing resources or costs among various projects, departments, or segments.