hard · FRM Part 1
An analyst reports a 95% confidence interval for a hedge ratio as [0.72, 0.88].
Based on this interval, can the null hypothesis H_0: β_1 = 0.90 be rejected at the 5% significance level?
- Yes, but only if the sample size is greater than 30.
- No, because the interval is centered at 0.80, which is positive.
- Yes, because 0.90 lies outside the confidence interval.
- No, because 0.90 is close to the upper bound of 0.88.
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