Tammy Welsh Has Two Investment Options to Choose From

question 47

Essay

Tammy Welsh has two investment options to choose from.The stocks of both ABC Inc. ,and XYZ Corp. ,are currently trading at $200.ABC Inc. ,is paying a dividend of $10,and is expected to trade at $215 in a year's time.XYZ Corp. ,is paying a higher dividend of $25.However,the price of XYZ's stock is only expected to go up to $203 a year from now.Experts are estimating inflation to be about 2% in a year's time.
A)Which stock should Tammy invest in and why?
B)If the expected inflation rate was revised to 2.5%,would it alter Tammy's choice? Explain your answer.

• A)Which stock should Tammy invest in and why?
• B)If the expected inflation rate was revised to 2.5%,would it alter Tammy's choice? Explain your answer.

Understand the binomial distribution and its application.

Differentiate between null and alternative hypotheses.

Identify the appropriate statistical test for hypothesis testing.

Recognize the components and characteristics of statistical and research hypotheses.

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Definitions:

Hormones

Chemical messengers produced by glands in the body that regulate the activity of cells or organs.

Humanism

An outlook or system of thought attaching prime importance to human rather than divine or supernatural matters, emphasizing common human needs and seeking rational ways of solving human problems.

Structuralism

An approach in psychology that seeks to understand the structure of the mind by analyzing the most basic components of thoughts and sensations.

Behaviourism

A theory of learning which states that all behaviors are acquired through conditioning, and it focuses on observable behaviors over internal events like thinking.