An Analyst Studies a Data Set of the 2011 Year-End

question 2

Multiple Choice

An analyst studies a data set of the 2011 year-end book value per share for all companies listed on the New York Stock Exchange.This data set is best described as ___________.

• A)Time-series data
• B)Cross-sectional data
• C)Neither time-series nor cross-sectional data
• D)A combination of time-series and cross-sectional data

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Definitions:

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its stock, usually estimated using models like the Capital Asset Pricing Model (CAPM).

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, and typically pays dividends before common stock.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote at shareholder meetings and receive dividends.

Beta

An indicator of how much a stock's price fluctuates in comparison to the general market.