Which of the Following Issues Should Be Considered with Respect

question 88

Multiple Choice

Which of the following issues should be considered with respect to the accuracy of stock pricing Models?

• A)Assumptions regarding growth rates are imprecise
• B)Assumptions regarding market returns are difficult to make accurately.
• C)The Gordon Model is only an approximation of the present value of an infinite stream of future cash flows.
• D)Both a. and b. above have to be considered.
• E)All of the above have to be considered.

---

Definitions:

SSE

Sum of Squared Errors; a measure of the discrepancy between the data and an estimation model.

Regression Coefficients

Quantitative measures that assess the relationship between the dependent variable and each independent variable in regression analysis.

Null Hypothesis

A hypothesis that states there is no statistical significance between two variables and any observed difference is due to chance.

F-test

The F-test is a type of statistical test that determines if there are significant differences between the variances of two or more samples.