A Stock That Pays a Constant Annual Dividend Will Have

question 86

Multiple Choice

A stock that pays a constant annual dividend will have a market price that

• A)increases when the market rate of return increases.
• B)decreases when the market rate of return increases.
• C)decreases over time.
• D)increases over time.
• E)always remains constant.

---

Definitions:

Correlation Matrix

A table showing the correlation coefficients between several variables, which can indicate the strength and direction of the relationship between pairs of variables.

Multicollinearity

A situation in regression analysis where two or more predictor variables are highly correlated, potentially undermining the statistical validity of the analysis.

High Correlation

Indicates a strong statistical relationship between two variables, implying that changes in one variable are closely related to changes in another.

Independent Variables

Factors in a study or simulation that are intentionally altered to see how they impact the variables that depend on them.