1. The return on equity for four hypothetical companies from a list of 100 companies is given below:

Little Wonder | 10.5% |

Genesis Ltd. | 16.25% |

Moral Corp. | 9.81% |

Travis Ltd. | 12.0% |

- Option : B
- Explanation : Use the following keystrokes to calculate the sample standard deviation: [2nd] [DATA] [2nd] [CLR WRK] X01 = 10.5 X02 = 16.25 X03 = 9.81 X04 = 12 s represents the value of sample standard deviation = 2.88.

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2. Semivariance is defined as the average squared deviation:

- Option : A
- Explanation : Semivariance can be defined as the average squared deviations below the mean.

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- Option : B
- Explanation : According to Chebyshev‟s inequality, the proportion of the observations within k standard deviations of the arithmetic mean is at least 1– 1/k2 for all k > 1. For k = 2, that proportion is 1– 1/22, which is 75%. The lower endpoint is, therefore the mean (144) minus 2 times 12 (the standard deviation) and the upper endpoint is 144 plus 2 times 12. 144– (2 × 12) = 120; 144 + 2(12) = 168

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- Option : C
- Explanation : The formula for Chebyshev‟s inequality is: 1 – 1/k2 = % of distribution 1 – 1/k2 = 0.8889; solving for k, we get k = 3 88.89% of any distribution lies within 3 standard deviations.

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