SHY (NYSEARCA: SHY)is a 1−3 Year Treasury Bond Fund That

question 16

Multiple Choice

SHY (NYSEARCA: SHY) is a 1−3 year Treasury bond fund that is considered to be a market-neutral position.Using the S&P 500 as a benchmark and five years of monthly log-return data,the rank correlation coefficient of SHY with the S&P 500 is found to be r_s = -0.284.To determine if the SHY is not a market-neutral position,the competing hypothesis are __________.

• A) H₀: ρ_s = 0;H_A: ρ_s ≠ 0
• B) H₀: ρ_s ≤ 0;H_A: ρ_s > 0
• C) H₀: ρ_s ≥ 0;H_A: ρ_s < 0
• D) H₀: ρ_s ≠ 0;H_A: ρ_s = 0

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Definitions:

Potential Payoff

The expected or anticipated return or benefit derived from an investment or action.

Subordinates

Individuals who are lower in rank or position within an organization, often reporting to a supervisor or manager.

Non-salary Expenses

Costs incurred by a business or individual that are not related to direct wages or salaries, such as utilities, rent, or equipment.