1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
viktelen [127]
3 years ago
10

If markets are efficient, what should be the correlation coefficient between stock returns for two nonoverlapping time periods?

Business
1 answer:
S_A_V [24]3 years ago
7 0

Answer: Zero

Explanation:

The Correlation Coefficient measures the relationship between 2 variables under study and ranges from -1 to +1 which -1 meaning that the two are perfectly negatively correlated and +1 meaning they are perfectly positively correlation. A Correlation Coefficient of 0 means that there is no relationship.

An efficient market is one where all information is available to every market participant. This means that one cannot use information from one period to make abnormal profits in another period because all information is available. The Correlation Coefficient will therefore show 0 because information from the previous period is not being used in another period meaning there is no relationship between stock returns.

You might be interested in
Which type of unethical activity is sometimes caused by channel management?
Svetlanka [38]
<span>Channel management is defined as the type of management that is used in a situation where a company develops various marketing techniques and strategies in order to reach the widest possible customer base. The channels are the means used to market the product. Unethical activity usually caused by channel management is UNFAIR DISCRIMINATION. </span>
5 0
3 years ago
Read 2 more answers
Pro forma balance sheet Peabody &amp; Peabody has 2019 sales of $10 million. It wishes to analyze expected performance and finan
zysi [14]

Answer:

Peabody & Peabody

a. Peabody & Peabody

Pro Forma Balance Sheet

December 31, 2021 ($000)

Cash                             480

Marketable securities 200

Accounts receivable 1,440

Inventories                2,160

Total current assets 4,280

Net fixed assets       4,820

Total assets              9,100

Liabilities and Stockholders equity:

Accounts payable          1,680

Accruals                           500

Other current liabilities     80

Total current liabilities 2,260

Long-term debt           2,000

Total liabilities             4,260

Common equity         3,900            

Total liabilities and stockholders’ equity $8,160

Required Finance         940

b. From the statement prepared in part a, it is clear that Peabody & Peabody requires new financing of $940,000 for 2020 to meet the projected assets base.

Explanation:

a) Data and Calculations:

2019 Sales = $10 million

Pro Forma Balance Sheet

December 31, 2017 ($000)

Assets:

Cash                             400

Marketable securities 200

Accounts receivable 1,200

Inventories                1,800

Total current assets 3,600

Net fixed assets       4,000

Total assets              7,600

Liabilities and Stockholders equity:

Accounts payable          1,400

Accruals                           400

Other current liabilities     80

Total current liabilities  1,880

Long-term debt           2,000

Total liabilities              3,880

Common equity           3,720

Total liabilities and stockholders’ equity $7,600

Purpose: To analyze expected performance and financing needs for 2021.

1. Percent of Sales ($12 million)

Accounts receivable, 12%  $1,440

Inventory, 18%                    $2,160

Accounts payable, 14%      $1,680

Net profit margin, 3%          $360

2. Market securities            $200

3. Cash balance (desired minimum) $480

4. Net fixed assets           4,000

New equipment in 2020    650

Depreciation, 2020           (290)

New equipment in 2021    850

Depreciation, 2021            (390)

Net fixed assets            $4,820

5. Accruals                       $500

8. Dividend payout = 50% of $360 = $180

Retained Earnings (current) = $180

Common Equity:

2019    3,720

Income   180 (Retained Earnings)

2020  3,900

5 0
3 years ago
Which is an example of an external factor that may affect purchase decisions?
prohojiy [21]
Government policies specific to the entrepreneurs business is the answer. This is the only external factor.
6 0
3 years ago
On January 1, 2020, Ann Price loaned $187825 to Joe Kiger. A zero-interest-bearing note (face amount, $250000) was exchanged sol
igomit [66]

Answer:

$18,783

Explanation:

Ann Price loaned to Joe Kiger × Rate of Interest

Ann Price loaned to Joe Kiger$187,825

Rate of Interest 10%

Hence;

$187,825 × .10

= $18,783

Therefore amount of interest income should Ms. Price recognize in 2020 will be

$18,783

6 0
3 years ago
Why is the market demand curve for public goods calculated as a vertical summation of individual demand​ curves?
never [62]

Answer:

c

Explanation:

A public good is a good that is non excludable and non rivalrous. Everyone has assess to the statue and because one person is enjoying the view of the statue does not means another person cannot enjoy the view of the statue. The demand curve for public goods is summed vertically because all individuals can consume every unit of the good at the same time.

A private good is a good that is excludable and rivalrous. They are usually exchanged in the market by private sector businesses. It is only you who purchased the ferrari and those you allow that can use the ferarri.

8 0
3 years ago
Other questions:
  • Which of the following statements is a characteristic particular to the postindustrial economy?
    12·1 answer
  • An auditor knew that the purpose of her audit was to render reasonable assurance on financial statements that were to be used fo
    10·1 answer
  • Honest tea considers themselves a​ mission-driven business. they have decided that it is important to understand the communities
    9·1 answer
  • Investors willing to pay the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn
    13·1 answer
  • The journal entry to record a note received from a customer to replace an account is A. debit Notes Receivable credit Accounts R
    5·1 answer
  • Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,200
    6·1 answer
  • Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made without
    10·1 answer
  • Lon 4 of 20
    11·1 answer
  • A very useful guide for making investment decisions is: The shorter the payback period, the more profitable the project. Group s
    15·1 answer
  • an analyst gathered the following data about a company: 1,000 common shares are outstanding (no change during the year). net inc
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!