The Ratio of Two Independent Chi-Squared Variables Divided by Their

question 40

Multiple Choice

The ratio of two independent chi-squared variables divided by their degrees of freedom is:

• A)normally distributed
• B)Student t-distributed
• C)chi-squared distributed
• D)F-distributed

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account to avoid a margin call.

Short 100 Shares

The process of selling 100 shares that are not currently owned, with the expectation of buying them back at a lower price for a profit.

Initial Margin

The minimum amount of funds required to open a position in the futures market, intended to cover potential losses.

Maintenance Margin

The minimum amount of capital that must be maintained in a margin account after a purchase or trade, to cover the risk of loss.