The Formula for Horizontal Analysis of Changes Since the Base

question 153

Multiple Choice

The formula for horizontal analysis of changes since the base period is the current year amount

• A) divided by the base year amount.
• B) minus the base year amount divided by the base year amount.
• C) minus the base year amount divided by the current year amount.
• D) plus the base year amount divided by the base year amount.

---

Definitions:

Index Model

A financial model that describes the return of a stock as a function of the return of a market index, plus residual factors unique to that stock.

Standard Deviation

A statistical measure of the dispersion or variability around the mean of a set of data points, often used to quantify the risk of an investment.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Unanticipated Macroeconomic Events

Economic events that are unexpected and can have significant impacts on markets and investments, such as sudden changes in inflation or interest rates.