What is the standard deviation does Biggs assume for returns?
Biggs assumes that the population cross-sectional standard deviation of growth manager returns is 6 percent and that the returns are independent across managers. A How large a random sample does Biggs need if he wants the standard deviation of the sample means to be 1 percent?
When the distribution is unknown the probability of extreme data increases?
We can see that when the distribution is unknown and using Chebychev’s theorem, the probabilities of getting extreme data increases.
What is the price elasticity of demand for gasoline?
The U.S. Energy Information Administration estimates that the price elasticity of demand for gasoline in the United States is −0.02 in the short run. Source: Michael Morris, "Gasoline Prices Tend to Have Little Effect on Demand for Car Travel," eia.gov, revised December 17, 2014.
What is it called when the prices of stocks are expected to rise quizlet?
Excessive rising stock prices due to expected rises in prices. Bull Market.
Are higher stock prices good?
Publicly traded companies place great importance on their stock share price, which broadly reflects a corporation's overall financial health. As a rule, the higher a stock price is, the rosier a company's prospects become.
What determines the price of a stock in the market quizlet?
how are stock prices determined? price = present value of the payments to be received from owning it. the expected return necessary to compensate for the risk of investing in stocks. Firms call it the equity cost of capital - rate they need to pay to attract investors.
Which of the following terms shows a firms revenues cost and profit over a period of time?
A balance sheet shows the firm's overall financial position at some point in time, while an income statement shows the firm's revenues, costs, and profits at some point in time.
What does increased stock price indicate?
Increasing share prices indicate that investors are expecting higher earnings growth from the company in the future. As the company invests in itself, its potential value for greater earnings increases.
What does higher stock price indicate?
By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
Which factors can affect a stock's price?
Factors that can affect stock pricesnews releases on earnings and profits, and future estimated earnings.announcement of dividends.introduction of a new product or a product recall.securing a new large contract.employee layoffs.anticipated takeover or merger.a change of management.accounting errors or scandals.
What are the three main reasons stock prices go up?
Unfortunately, there is no clean equation that tells us exactly how the price of a stock will behave. That said, we do know a few things about the forces that move a stock up or down. These forces fall into three categories: fundamental factors, technical factors, and market sentiment.
How are the stock prices determined?
After a company goes public, and its shares start trading on a stock exchange, its share price is determined by supply and demand for its shares in the market. If there is a high demand for its shares due to favorable factors, the price will increase.
Which of the following terms refers to a flow of funds from savers to firms through financial markets quizlet?
Indirect Finance: refers to a flow of funds from savers to borrowers through financial intermediaries such as banks.
Which one of the following statements correctly describes the contents of the statement of profit or loss?
Which ONE of the following statements correctly describes the contents of the Statement of Profit or Loss? The Statement of Profit or Loss contains a record of income generated and expenditure incurred over a given period.
What is the profit and loss account on a balance sheet?
The profit and loss (P&L) account summarises a business' trading transactions - income, sales and expenditure - and the resulting profit or loss for a given period. The balance sheet, by comparison, provides a financial snapshot at a given moment.