Tiffany & Co

question 10

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 (n = 60) .The accompanying table shows the regression results when estimating the CAPM model for Tiffany's return. To determine whether abnormal returns exist,which of the following competing hypotheses do you set up?

• A) H₀:α = 0;H_A:α ≠ 0
• B) H₀:β = 0;H_A:β ≠ 0
• C) H₀:α ≤ 1;H_A:α > 1
• D) H₀:β ≤ 1;H_A:β > 1

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Definitions:

Hidden Costs

Expenses that are not immediately apparent at the time of purchase but become evident later in the use or maintenance of an item.

Feigned Scarcity Technique

A marketing strategy where a company or seller creates an artificial sense of scarcity for a product or service to increase demand.

Reciprocity Norm

A social norm that involves an expectation that people will respond to each other in kind, returning benefits for benefits.

Social Influence

The effect that the words, actions, or mere presence of other people have on our thoughts, feelings, attitudes, or behavior.