The Correlation Between Sales and Radio Ad Budget

question 13

Multiple Choice

The correlation between sales and radio ad budget

• A)is 0.
• B)is negative.
• C)is approximately .9.
• D)is less than .75.
• E)cannot be calculated, because the number of data points is too small.

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Definitions:

Market Capitalization Rate

A rate used to evaluate the valuation of an investment market, typically calculated as the total market cap of all companies in the market divided by the market's total earnings.

Per Share FCFE

The amount of free cash flow to equity (FCFE) available to shareholders divided by the number of outstanding shares.

Required Rate of Return

The minimum expected return by an investor for investing in a risky asset, considering the risk involved.

FCFF

Free Cash Flow to Firm; a measure of financial performance that expresses the net amount of cash that is generated for the firm, inclusive of financing and debt service.