Fama and French (2002) studied the equity premium puzzle by breaking their sample into subperiods and found that
A. the equity premium was largest throughout the entire 1872 1999 period.
B. the equity premium was largest during the 1872 1949 subperiod.
C. the equity premium was largest during the 1950 1999 subperiod.
D. the differences in equity premiums for the three time periods were statistically insignificant.
E. the constant growth dividend discount model never works.
C. the equity premium was largest during the 1950 1999 subperiod.
They concluded that the equity premium puzzle has occurred mostly in modern times. This may be due to the difference between the dividend discount model's (DDM) result of expected return in comparison to actual returns earned. The DDM yields a smaller risk premium during the 1950 1999 period, while actual returns have been higher. This may be due to unanticipated capital gains.
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A quasi contract can be best described as:
A. a contract where terms are stated orally only. B. an agreement that contains all but one of the basic elements needed to form an enforceable contract. C. contract-like duties imposed by the court to prevent unjust enrichment. D. a contract that has been fully performed.
The following data is given for the Taylor Company: Budgeted production 1,000 units Actual production 980 units Materials: Standard price per lb $2.00 Standard pounds per completed unit 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor: Standard hourly labor rate $14 per hour Standard hours allowed per completed unit 4.5 Actual labor hours
worked 4,560 Actual total labor costs $62,928 Overhead: Actual and budgeted fixed overhead $27,000 Standard variable overhead rate $3.50 per standard labor hour Actual variable overhead costs $15,500 Overhead is applied on standard labor hours. The direct material quantity variance is: A) 600F B) 600U C) 80F D) 80U
According to the S.M.A.R.T objective framework, a specific objective is one which is ________
A) rational and allocates an adequate amount of resources to support its completion B) measurable for its effectiveness C) possible and leverages existing capabilities and skills D) precise about what it intends to achieve
The estimated maximum potential activity for a specified time is known as theoretical capacity
Indicate whether the statement is true or false