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Analyst Shelly King is using a returns and earnings database to examine the past performance of stocks. King sorts stocks from high to low P/E ratio by dividing the beginning of the year stock price by the reported year-end earnings per share recorded in the database for the prior year. King then creates portfolios ofContinue…

Alice Morton, CFA, is reviewing a research paper that reaches a conclusion based on two hypothesis tests with p-values of 0.037 and 0.064. Morton should conclude that: A) both of these tests’ null hypotheses can be rejected with 90% confidence. B) neither of these tests’ null hypotheses can be rejected with 95% confidence. C) onlyContinue…

Given the information in the table for Portfolios A, B, and C, and a target return of 3%, which portfolio has the lowest shortfall risk? A) Portfolio A. B) Portfolio B. C) Portfolio C. ExplanationThe portfolio with the lowest probability of returns less than 3%, is the one with the highest safety-first ratio. Safety-first ratioContinue…