Proponents of the bubble view believe that when using historical averages to estimate an equity premium, (A)

Fantastic news! We've Found the answer you've been seeking!

Question:

Proponents of the bubble view believe that when using historical averages to estimate an equity premium,

(A) the equity premium will be higher after recent market surges

(B) the equity premium will be lower after recent market surges

(C) the average should be calculated using data from the earliest recorded point in time to ensure that any temporary bubbles are smoothed out

(D) the average should be based on the last 10 to 15 years of historical data only since earlier data is no longer descriptive of current conditions, e.g., bubbles

Related Book For answer-question

Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

See More Books

Posted Date: Feb 14, 2022 01:47 AM

See More Questions

Proponents of the bubble view believe that when using historical averages to estimate an equity premium, (A) the equity premium will be higher after recent market surges (B) the equity premium will...
When cars C and D stop on a two-lane bridge, the forces exerted by their tires on the bridge are as shown. Determine the total reactions at A and B when (a) ) A = 2.9 m, (b) A = 8.1 m. 12 m 73 KN 7.9...
When cars C and D stop on a two-lane bridge, the forces exerted by their tires on the bridge are as shown. When both cars are on the bridge, determine (a) The value of a for which the total reaction...
Limits from graph In this problem we evaluate limits from the graph. Consider the graph of f given in [Figure 1]. Evaluate each of the following limits (or explain why if the limit does not exist)....
Hotels.com asks users to rate hotels that they have visited on a scale from 0 (worst) to 5 (best). Ninety-nine guests gave a hotel at the St. Louis Convention Center a 4.5 out of 5 rating.
Classify the following descriptions of constraints as bounds, limitations, requirements, proportional relationships, or balance constraints: a. Each serving of chili should contain a quarter pound of...
What forms of negligence are described in this chapter?
With the rapid growth of cloud computing, many organizations are contracting with third-party service providers to process and store all kinds of data off site. In doing so, entities are now...
Consider the following systems of linear equations: X1+0.5x2+x3 = -1 3x1+0.2x2 + 2x3 = 0 2x1 +0.1X2+X3 = 1 (a) Put the equation in compact matrix form Ax = B. (b) Find the inverse of matrix A using...
Ramada Company produces one golf cart model. A partially complete table of company costs follows: Required: 1. Complete the table. 2. Ramada sells its carts for $1,200 each. Prepare a contribution...
Microbiology: Stain PrimaryStain Counterstain AcidFast 1._______________________ 2. _________________________ Capsule stain 3._______________________ 4. _________________________ For questions 5-8,...
A new design of frying pan is made from glass ceramic 9606, a material with excellent thermal shock resistance originally developed for missile radomes. The pan bottom is $4.2 \mathrm{~mm}$ thick....
The speed of sound in Pyrex (borosilicate) glass is 5610 m/s. Find the density of this glass from Appendix A and use it to estimate the modulus E of Pyrex.
Air enters the combustion chamber of a ramjet engine (Fig. ??) at T 0 = 1700K and M = 0.3. How much can the stagnation temperature be increased in the combustion chamber without affecting the inlet...
The volume change of mixing, in [cm3/mol], for binary liquid mixture of sulfuric acid (1) and water (2) at 25C is given by the following expression: _Uma = -13.1x12 - 2.25x3x2 mix
When the reservoir pressure and temperature of a supersonic wind tunnel are $15 \mathrm{~atm}$ and $750 \mathrm{~K}$, respectively, the mass flow is $1.5 \mathrm{~kg} / \mathrm{s}$. If the...
In this paper we review the linkages between the quality of public finances, that is, the level and composition of public expenditure and its financing via revenue and deficits, and economic growth....
Find the area of the surface generated by revolving the para- metric curve x = cos 1, y = sin? 1 (0 < I sa/2) about the y-axis.
In what ways is the economic substance of a lessees capital lease similar to, and different from, that of purchasing the equipment using the proceeds of a loan repayable in installments?
The ABC Company starts the year in fine shape. The firm makes widgetsjust what the customer wants. It makes them for $0.75 each and sells them for $1.00. The ABC Company keeps an inventory equal to...
Accounting for bonds using the fair value option basedd on the current market interest rate. Restin Corporation issues $20,000,000 face value, 10 year, 8% semiannual coupon bonds on January 1, 2008....
Given the four criteria necessary for a sale to be complete, which of the following is not one of those conditions? 1. Delivery has occurred or services rendered. 2. Cash has been collected. 3. The...
What is the difference between a business and a pure charity? Between a business and a governmental agency?
Sketch the $P-V$ phase diagram for helium-4 using the sketch of the $P-T$ phase diagram in Figure 4.3. Ps P S superfluid Pe T To T FIGURE 4.3 Sketch of the P-T phase diagram for helium-4. The...

Proponents of the bubble view believe that when using historical averages to estimate an equity premium, (A)

Question:

Expert Answer:

opton A This option is incorrect Because an economic bubble tends ... View the full answer

Financial Accounting an introduction to concepts, methods and uses

Students also viewed these accounting questions