Tiffany & Co

question 37

Multiple Choice

Tiffany & Co. has been the world's premier jeweler since 1837. The performance of Tiffany's stock is likely to be strongly influenced by the economy. Monthly data for Tiffany's risk-adjusted return and the risk-adjusted market return are collected for a five-year period . The accompanying table shows the regression results when estimating the Capital Asset Pricing Model (CAPM) model for Tiffany's return. When testing whether there are abnormal returns, or whether the alpha coefficient is significantly different from zero, the value of the test statistic is ________.

• A) −1.98
• B) 1.98
• C) 4.33
• D) 9.58

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Definitions:

Factory Machine Usage

The extent to which manufacturing equipment is utilized during the production process, often impacting efficiency and costs.

Variable Costs

Expenditures that change in direct correlation with production levels or sales figures.

Rent

Rent is the payment made by a tenant to a landlord for the use of a property, equipment, or other assets for a specified period.

Warehouse

A warehouse is a large storage building where goods are stored before they are distributed for sale or further processed.