When Using the High-Low Method,the Two Observations Used Are the High

question 137

Multiple Choice

When using the high-low method,the two observations used are the high and low observations of the:

• A)residual term.
• B)slope coefficient.
• C)cost driver.
• D)dependent variables.

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Definitions:

Risk-Free Rate

A benchmark interest rate at which an investment is expected to yield a return without any risk of financial loss, usually associated with government securities.

Market Risk Premium

The extra return that investors require for choosing to invest in the general market rather than risk-free investments.

Beta

A measure of a stock's volatility in relation to the overall market; it indicates the stock's sensitivity to market movements.

Dividend Growth Model

A valuation method used to estimate the value of a stock by using predicted dividends and discounting them back to present value.