Market Based Forward Looking Estimate of Future Expected Returns Are

question 28

Multiple Choice

Market based forward looking estimate of future expected returns are obtained using one of the following:

• A) Estimation of the market probabilities from the prices at which derivative securities trade.
• B) Historical data to estimate expected returns and measures of risk
• C) Estimation of equity risk premium
• D) Earning-price ratio and dividend-price ratio.

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Definitions:

Compound

A substance formed from two or more elements chemically united in fixed proportions; or, in a linguistic context, a term made up of two or more words functioning as a single unit.

Atomic

Constituting an undivided whole; elementary, with reference to particles or concepts.

Truth-functional Compound

A complex proposition in logic that is made up of simpler propositions and whose truth-value depends solely on the truth-values of these simpler propositions.

Quantifier

In logic, symbols that specify how many objects in the universe of discourse satisfy a given condition.