All of the following are properties of the student 抯 t-distribution EXCEPT it:
A. is symmetrical.
B. has "fatter tails" than a normal distribution.
C. is defined by a single parameter, the degrees of freedom (df).
D. is a normal distribution.
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Which of the following statements is FALSE regarding hypothesis testing?
An analyst can perform a one-tailed or a two-tailed test.
B. A type I error is acceptance of a hypothesis that is actually false.
C. A type II error is the acceptance of a hypothesis that is actually false.
D. The significance level is the risk of making a type I error.
Sarah Parker is buying a new $25,000 car. Her trade-in is worth $5,000 so she needs to borrow $20,000. The loan will be paid in 48 monthly installments and the annual interest rate on the loan is 7.5%. If the first payment is due at the end of the first month, what is Sarah 抯 monthly car payment?
A. $480.57.
B. $483.58.
C. $416.67.
D. $427.63.
The mean return of Bartlett Co. is 3 percent and the standard deviation is 6 percent based on 20 monthly returns. What is the standard error of the sample?
A. 2.00%.
B. 0.67%.
C. 0.50%.
D. 1.34%.
Johnson Inc. manages a growth portfolio of equity securities that has a mean monthly return of 1.45% and a standard deviation of 10.8%. The S&P 500 has a mean monthly return of 1.2% and a standard deviation of 6.8%. The mean monthly return on T-bills is 0.30%. Calculate Sharpe 抯 reward-to-variability ratio for the growth portfolio and for the S&P 500. Which of the following statements is TRUE?
A. Based on a reward-to-variability ratio the growth portfolio is preferable to the S&P 500.
B. The growth portfolio has more excess return per unit of risk than the S&P 500.
C. An investor would always prefer the S&P 500 to the growth portfolio.
D. Based on a reward-to-variability ratio the S&P 500 is preferable to the growth portfolio.