The Following Information Is to Be Used to Answer Questions

question 47

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 was least well diversified?

• A) Fund 1
• B) Fund 2
• C) Fund 3
• D) Fund 4
• Solution: Fund 4 has the smallest R².

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Definitions:

Engage

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Identification

The psychological process by which an individual aligns themselves with the attitudes, beliefs, or behaviors of another person or group.

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Precausal reasoning refers to a stage in child development where logic is not yet fully developed, leading to reasoning based on intuition or superficial connections rather than causal relationships.

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