CFA Level 1 Exam
Question No. 1
Richard Eisenberg, a quantitative analyst with Middle Road Brokerage, has been instructed to perform a
statistical analysis to determine the relationship between the volatility of smaller-cap stocks and the quarterly performance of a series of smaller-cap mutual funds. Mr. Eisenberg begins his assignment by formulating and stating a hypothesis. Next, he identifies the appropriate test statistic and the probability distribution for the series. Mr. Eisenberg then progresses to specifying the significance level for the hypothesis test. Now that the first three steps of a hypothesis test have been completed, Mr. Eisenberg should proceed to which of the following? Choose the best answer.
Choose the correct option from the given list.
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