A "Runs Test" on Successive Stock Price Changes Which Supports

question 60

Multiple Choice

A "runs test" on successive stock price changes which supports the efficient market hypothesis would show the actual number of runs

• A) Falls into the range expected of a random series.
• B) Falls into the range expected of a dependent series.
• C) Is small.
• D) Is large.
• E) Would approximate N/2.

Understand the role of salvage value and useful life in calculating depreciation.

Analyze the effect of depreciation on financial statements and tax obligations.

Evaluate the choice of depreciation method on the financial health and reporting of a business.

Apply knowledge to determine the book value of assets after a certain period of depreciation.

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Definitions:

Risk Premium

The additional return expected by an investor for taking on a higher level of risk, compared to a risk-free investment.

Nominal Interest Rate

The interest rate in terms of nominal (not adjusted for purchasing power) dollars.

Coupon Rate

A bond’s interest payments per dollar of par value.

Expected Rate of Inflation

An estimate of the rate at which the general level of prices for goods and services will rise over a period.