Instruction 12-7
an Investment Specialist Claims That If One Holds

question 113

Multiple Choice

Instruction 12-7
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.
$$\begin{array} { | l | r | r | r | r | } \hline & \text { Coefficients } & \text { Standard Error } & \text { T Stat } & { \text { P-value } } \\\hline \text { Intercept } & 4.866004258 & 0.35743609 & 13.61363441 & 8.7932 \mathrm { E } - 13 \\\hline \mathrm { S } \& \mathrm { P } & - 0.502513506 & 0.071597152 & - 7.01862425 & 2.94942 \mathrm { E } - 07 \\\hline\end{array}$$
-Referring to Instruction 12-7,to test whether the prison stocks portfolio is negatively related to the All Ordinaries index,the p-value of the associated test statistic is

• A)2.94942E-07.
• B)(2.94942E-07)2.
• C)2.94942E-07 / 2.
• D)8.7832E-13.

Distinguish between budgeting processes for production-oriented and merchandising companies.

Identify appropriate activity indexes for budgeting specific positions or departments within an entity.

Analyze the impact of budget assumptions on cash flow, including expected cash receipts and disbursements.

Recognize the role and benefits of budgeting within organizations, including both profit and not-for-profit entities.

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Panel Data

Information collected from a group (or panel) of consumers over a period of time.

Dishwasher Detergent

Dishwasher detergent is a cleaning agent formulated specifically for use in dishwashers, designed to remove food residues, grease, and stains from dishes and utensils during the wash cycle.

Satisfaction

The feeling of pleasure or fulfillment that comes from achieving or exceeding expectations.