TABLE 13-7
An investment specialist claims that if one holds a portfolio that moves in the opposite direction to the market index like the S&P 500, then it is possible to reduce the variability of the portfolio's return. In other words, one can create a portfolio with positive returns but less exposure to risk.

-Referring to Table 13-7, which of the following will be a correct conclusion?
A) We cannot reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related.
B) We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related.
C) We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related.
D) We can reject the null hypothesis and conclude that there is not sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related.

Question

TABLE 13-7
An investment specialist claims that if one holds a portfolio that moves in the opposite direction to the market index like the S&P 500, then it is possible to reduce the variability of the portfolio's return. In other words, one can create a portfolio with positive returns but less exposure to risk.
  
-Referring to Table 13-7, which of the following will be a correct conclusion?
A) We cannot reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related. 
B) We can reject the null hypothesis and, therefore, conclude that there is sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related. 
C) We cannot reject the null hypothesis and, therefore, conclude that there is not sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related. 
D) We can reject the null hypothesis and conclude that there is not sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related.

Quizplus · Accepted Answer

The p-value is less than the significance level of 0.05, indicating that we can reject the null hypothesis and conclude that there is sufficient evidence to show that the prisons stock portfolio and S&P 500 index are negatively related. This supports the investment specialist's claim that holding a portfolio that moves in the opposite direction to the market index can reduce variability and risk.

TABLE 13-7 An Investment Specialist Claims That If One Holds a Portfolio