Question: percent deviation 15% 10% 5% 0%. -5% -10% -15% -20% -25% -30% -35% There 9/4/80 9/4/81 9/6/82 9/6/83 9/5/84 9/5/85 98/9/6 9/7/87 - 9/6/88

percent deviation 15% 10% 5% 0%. -5% -10% -15% -20% -25% -30% -35% There 9/4/80 9/4/81 9/6/82 9/6/83 9/5/84 9/5/85 98/9/6 9/7/87 - 9/6/88 9/6/89 - 9/6/90 winn 16/9/6 9/7/92- 9/7/93 9/7/94 9/7/95 Fig. 2.1 Log Deviations From Royal Dutch/Shell Parity. Source: Froot and Dabora (1998). This figure, which we discussed in the lecture, presents the percentage deviation from the 60:40 ratio in the market values of equity of Royal Dutch and Shell between September 1980 and September 1995. 1. (2 points) What is the main finding of this Figure? 2. (3 points) What is the explanation for the finding?

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