Exhibit 11-4

question 28

Multiple Choice

Exhibit 11-4.Consider the expected returns (in percent) from the two investment options.Beth claims that the variances of the returns for the two investments differ.Use the following data to arrive at the results. Refer to Exhibit 11-4.Test Beth's claim at the 5% significance level.What is the conclusion?

• A)p-value = 0.7127 > α = 0.05;Beth's claim is correct.
• B)p-value = 0.7127 > α = 0.05;Beth's claim is wrong.
• C)p-value = 0.7127 < α = 0.05;Beth's claim is wrong.
• D)p-value = 0.7127 < α = 0.05;Beth's claim is correct.

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Definitions:

Minimum Prices

A price floor set by the government, ensuring that goods and services cannot be sold below this level, typically to protect producers.

Demand-Side Market Failures

Underallocations of resources that occur when private demand curves understate consumers’ full willingness to pay for a good or service.

Supply Curve

Represents the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply to the market.

Willingness To Pay

The maximum amount a consumer is prepared to spend to acquire a good or service, reflecting its perceived value.