A Financial Analyst Maintains That the Risk,measured by the Variance,of

question 93

Multiple Choice

A financial analyst maintains that the risk,measured by the variance,of investing in emerging markets is more than 280(%) ².Data on 20 stocks from emerging markets revealed the following sample results: = 12.1% and s² = 361(%) ² .Assume that the returns are normally distributed.Which of the following is the correct value of the test statistic?

• A) = 36.19
• B) = 24.50
• C) = 24.50

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Definitions:

Phrenology

A now-discredited theory that suggested the bumps on the skull could predict mental traits and character traits.

Pseudoscience

A collection of beliefs or practices mistakenly regarded as being based on scientific method, lacking empirical support and reproducibility.

Critical Thinker

An individual who actively engages in analysis, synthesis, and evaluation of information gathered from observation, experience, or communication.

Common Sense

Practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by (common to) nearly all people.