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Exhibit 20

question 25

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Exhibit 20.9.A shipping company believes there is a linear association between the weight of packages shipped and the cost.The following table shows the weight (in pounds) and cost (in dollars) of the last 7 packages shipped. Exhibit 20.9.A shipping company believes there is a linear association between the weight of packages shipped and the cost.The following table shows the weight (in pounds) and cost (in dollars) of the last 7 packages shipped.   Refer to Exhibit 20.9.Using the critical value approach,the appropriate conclusion is: A) Do not reject the null hypothesis,conclude weight and cost are correlated B) Do not reject the null hypothesis,cannot conclude the is different from zero C) Reject the null hypothesis,cannot conclude the correlation coefficient is different from zero D) Reject the null hypothesis,conclude weight and cost are correlated Refer to Exhibit 20.9.Using the critical value approach,the appropriate conclusion is:


Definitions:

Stable Equilibrium

A state in which a system, once disturbed, returns to its original condition because the equilibrium is stable.

Expected and Required Returns

The returns that investors anticipate or demand from an investment considering its risk, often guiding investment decisions.

SML

Stands for Security Market Line; it represents the relationship between the expected return of an investment and its risk in the capital asset pricing model (CAPM).

Beta of the Portfolio

An assessment of a portfolio's volatility or inherent risk, relative to the overall market.

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