The Idea That Dividend Changes Reflect Managers' Views About a Firm's

question 21

Multiple Choice

The idea that dividend changes reflect managers' views about a firm's future earnings prospects is called the ________ hypothesis.

• A)signalling
• B)predictor
• C)instrumental
• D)pecking order
• E)dividend growth

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Definitions:

Managed Portfolio

An investment portfolio that's actively managed by a professional, aiming to achieve specified investment goals.

Alpha

A metric used to measure the performance of an investment relative to a benchmark, reflecting the excess return of the investment compared to the overall market performance.

Time-Weighted Return

A method of calculating investment returns that eliminates the effects of cash flows into and out of the portfolio, focusing solely on the investment's performance.