Hedge Funds Quiz 3

True or false? Reducing the size of a test (e.g. from 5% to 1%) increases the chance of a type I error.

• True

• False

Which of the following "ingredients" does not (!) belong to a `ggplot` figure:

• Canvas

• Geom(s)

• Coordinate system

• Paint thinner

Which of the following two statements describes a Type I error:

• Rejecting H0

  although it was true.

• Not rejecting

  H0 although it was false.

Two truths and one lie, spot the lie:

• To make a good estimation, the numbers of parameters K should exceed the number of observations T.

• The critical values of the Student-t distribution converge to the normal distribution for large degrees of freedom T-K

Which of the statements below are true about the plot on the left?

• Fund D has the lowest Sharpe Ratio.

• The plot uses geom_line() as a geometric object.

Which of the following statements is true about the regression output to the left:

• (Intercept) represents Jensens Alpha

• The Alpha of Fund B is statistically different from 0 at the 5% level.

• The Alpha of Fund B is statistically different from 0 at the 10% level.

• The R^2 of 0.7447 will increase if we include more parameters to the regression.

Finish the following code to produce the output to the left:

ggplot(data=NULL) +

aes(x=volatilities, y = means) +

(a)  

What's the name of the highlighted code section in the picture left?

• chunk

• trunk

• junk

• skunk

What is the name of the "language" used in the depicted RMarkdown header?

• YAML

• HTML

• XML

• R

• False

• True