The Following Information Is to Be Used to Answer Questions

question 22

Multiple Choice

The following information is to be used to answer questions 13-17.
$\begin{array}{llcc}\underline{ \text { SD }} &\underline{ \text {Beta }}&\underline{ \text {alpha }}&\underline{ \text { \(\mathrm{R}^{2}\) }} \\ \text { Fund 11.97 } &1.0&1.3&0.95\\ \text { Fund 22.94 } &0.8&0.6^*&0.80\\ \text { Fund 33.82} &1.2&-3.5&0.90\\ \text { Fund 44.70 } &1.4&4.2&065\\ &\\\end{array}$
$\text { *Significant at the } 5 \text { percent level }$
-Which of these funds had the highest performance as determined by Jensen's performance measure?

• A) Fund 1
• B) Fund 2
• C) Fund 3
• D) Fund 4
• Solution: Fund 2 has the only positive and statistically significant alpha

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Definitions:

Natural Experiments

Observational studies where the conditions are naturally occurring rather than being controlled or manipulated by the researcher, used to infer causality.

Random Experiments

Procedures or trials that yield different outcomes, each with a specific probability, even when repeated under the same conditions.

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Refers to the frequent absence of teachers from schools, which can detrimentally affect student learning and school performance.