To Estimate the Expected Return on Equity Investments

question 20

Multiple Choice

To estimate the expected return on equity investments:

• A) it is necessary to look only at recent data on stock returns.
• B) one needs to look only at expected returns on debt instruments.
• C) would require a study of stock market returns for many decades.
• D) would require only a course in financial economics.

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Definitions:

Appeals Courts

These are higher courts that review the decisions of lower courts to ensure the law was correctly applied and to address any errors. They do not re-evaluate the factual evidence.

Error Evidence

The presentation or use of incorrect information or data, often inadvertently, in arguments, research, or legal proceedings.

Lower Court

Courts that have the jurisdiction to hear and decide on cases first, before they can be appealed to higher courts.

Discretion

The freedom to decide what should be done in a particular situation, often within the framework of official authority.