A Manufacturer Claims That Less Than 1% of All His $\alpha$

question 48

Multiple Choice

A manufacturer claims that less than 1% of all his products do not meet the minimum government standards. A survey of 500 products revealed ten did not meet the standard.

• A) If \(\alpha\) = .01, the critical value is z = -2.33
• B) If \(\alpha\) = .01, the critical value is z = 2.33
• C) If \(\alpha\) = .01, the critical value is z = -1.96
• D) If \(\alpha\) = .01, the critical value is z = 1.96
• E) If \(\alpha\) = .01, the critical value is z = -2.58

Grasp the principles of the Capital Asset Pricing Model (CAPM) and its implications on expected returns.

Understand the nature of diversified and non-diversified risk in portfolio management.

Learn the significance of beta as a measure of systematic risk in portfolios.

Measure the implications of different risk factors (systematic and unsystematic) on securities and portfolios.

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Definitions:

Aggregate-supply Curve

A curve showing the total quantity of goods and services that producers in an economy are willing to supply at various price levels.

Phillips Curve

A concept in economics that demonstrates an inverse relationship between the rate of unemployment and the rate of inflation.

Shift

In economics, a change in the position of a demand or supply curve which reflects a change in conditions other than price.

Adverse Supply Shock

A sudden and significant decrease in the supply of a good or service, which typically leads to an increase in prices and can temporarily boost inflation.