A Drawback to the Historical Approach of Estimating an Asset's

question 54

Multiple Choice

A drawback to the historical approach of estimating an asset's expected return is:

• A) the risk of the firm may have changed over time.
• B) history always repeats itself.
• C) that the range of potential outcomes is often very broad.
• D) all of the above are drawbacks to the historical approach.

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Definitions:

Annual Tax Report

A yearly document submitted to tax authorities detailing an individual's or organization's income and taxes paid.

Compliance

The act of conforming to or following rules, standards, or laws.

Mission And Objectives

The fundamental purpose and goals that guide an organization or individual's actions and decisions.

Business Plan

An all-encompassing document outlining a business's mission, organization, goals, and activities.