All categories

1 year ago

The financial market history shows that the single-index capm fails empirical tests because ____________..

Business

1 answer:

Pachacha [2.7K]1 year ago

7 0

The financial market history shows that too many securities have statistically significant values.

All zeros that occur among any non-0 digits are significant. as an instance, 108.0097 consists of seven significant digits. All zeros which are on the right of a decimal point and added to the left of a non-zero digit are in no way significant. for example, zero.00798 contained three substantial digits.

The CAPM takes into consideration systematic threat (beta), which is neglected by other go-back fashions, such as the dividend bargain model (DDM). Systematic or market threat is an essential variable due to the fact it is unexpected and, for that reason, frequently can not be absolutely mitigated.

The intention of the CAPM formula is to evaluate whether a stock in all fairness is valued while its chance and the time cost of cash are as compared with its anticipated return. In other phrases, it's far viable, via understanding the personal parts of the CAPM, to gauge whether the present-day price of an inventory is consistent with its possibly go back.

Learn more about significant values here"brainly.com/question/24491627

#SPJ4

You might be interested in

what is the relationship between the securities and exchange chommisison and accounting standard setting in the united states

zlopas [31]

Complete Question:

What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?

A) The SEC requires all companies listed on an exchange to submit their financial statements to the SEC.

B) The SEC coordinates with the AICPA in establishing accounting standards.

C) The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

D) The SEC reviews financial statements for compliance.

Answer:

C) The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

Explanation:

Accounting principle can be defined as a general guideline to be followed by accountants or financial institutions when they record and report their financial transactions.

The Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the United States of America, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America. It has the power to propose securities rules and regulations, and enforce federal securities law in the securities market.

GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).

IFRS is an acronym for International Financial Reporting Standards, it comprises of a set of accounting standards or rules issued by the International Accounting Standards Board (IASB). The International Financial Reporting Standards ensures that statement of income, when reported by accountants is consistent, transparent and comparable globally.

Hence, the relationship between the Securities and Exchange Commission and accounting standard setting in the United States is that, The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

3 0

2 years ago

Federal express has a(n) ________________ in logistics and customer service, since these are activities it does especially well

andrezito [222]

The answer to this question is that federal express has a core competence. Core competence is the main strenghts or advantages of a business or the company in order for them to become competitive in the market. The concept of Core competency was introduced by Gary Hamel and Prahalad. Core competency is what the business or company can do to their customers and their expertise that is unique that can be valued by the customers.

8 0

3 years ago

Kermit calculated his total asset turnover to be 1.13. this tells kermit that:

Vikki [24]

Since Kermit calculated his total asset turnover to be 1.13, this tells Kermit that <span>every dollar of assets generates $1.13 in sales.

</span>Please note that it is useful to add the options provided with the question, in order to get an accurate answer and have your question answered quicker.

Hope this helps!!

3 0

3 years ago

What is the difference between gross & net pay

stich3 [128]

Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.

6 0

2 years ago

Project A requires a $280,000 initial investment for new machinery with a five-year life and a salvage value of $30,000. The com

solong [7]

Answer:

4 years

Explanation:

Payback period is the time in which a project returns back the initial investment in the form of net cash flow.

Initial Investment = $280,000

Net Income = $20,000

To calculate the net cash flows add bask the depreciation expense in Net income each year.

Depreciation = ($280,000 - $30,000) / 5 = $50,000

Net Cash Flow = $20,000 + $50,000 = $70,000

Payback period = Initial Investment / yearly cash flow = $280,000 / $70,000 = 4 years

5 0

3 years ago