Which of the following statements regarding the predictive value of historical returns is true? A. Historical...

Which of the following statements regarding the predictive value of historical returns is true?

A. Historical returns can be useful in predicting the general direction of a market over a long period.

B. Macroeconomic forces can be predicted from past market performance.

C. All of these answers.

D. Systemic risk, which diminishes the predictive value of historic returns, is the risk of company failure.

Expert Solution

It is not asking for all true statements, It is asking regarding only regarding true statement with regards to the predictive value of historical returns.

Option A. is correct.

Historical returns can be useful in predicting the general direction of a market over a long period.

Reason:
If we look at Sensex (Indian stock market index just like S&P500) and analyze the past 15-20 years data we can see that the direction of the market is always up in the long term with a CAGR of at least 12%

Option A. always holds good.

Reason for others being incorrect.

B. Macroeconomic factors can only sometimes be predicted but not always. The certainty level is also less.

It is true only under certain circumstances.

C. B&D are incorrect.

D. Systematic is the risk of Company failure and Industry failure. I cannot be predicted through historic market returns.

Answer: Option A. Historical returns can be useful in predicting the general direction of a market over a long period.

jeff jeffy answered 1 month ago

Which of the following statements regarding sales returns and allowances is not true? Group of answer...

Which of the following statements regarding sales returns and allowances is not true? Group of answer choices A reduction in the selling price because of damaged merchandise is included in sales returns and allowances. Sales returns and allowances do not have an impact on gross profit. Sales returns and allowances are closed to the Income Summary account. Sales returns and allowances are rarely disclosed in published financial statements. Sales returns and allowances are recorded in a separate contra-revenue account.

Which of the following statements is true when describing Positive Predictive Value? Question 7 options: A)...

Which of the following statements is true when describing Positive Predictive Value? Question 7 options: A) It tells you the probability that a test reflects a person who has the disease. B) It is a constant measurement of a test, regardless of the population it is used on. C) It is the ability of a test to correctly identify people who have the disease you are testing for. D) It increases when prevalence of the disease within your population.decreases. Negative...

Which of the following statements are true regarding sponges?

QUESTION 3 Which of the following statements are true regarding sponges? Sponges live in marine or freshwater environments. All sponges are photosynthetic. Adult sponges are non-motile Sponges do not have true tissues. QUESTION 4 Which of the following statements are true regarding arthropods. Similar to the earthworm, an arthropod has a body composed of repeated segments Arthropods have an exoskeleton Arthropods have a coelom Arachnids, crustaceans and insects are all arthropodsQUESTION 5 What are the four basic types of tissues found in animals? tracheid muscle tissue connective tissue epithelial tissue mesophyll nerve tissue

Which of the following statements regarding critical paths is true?

Which of the following statements regarding critical paths is true? A. On a specific project, there can be multiple critical paths, all with exactly the same duration. B. The duration of the critical path is the average duration of all paths in the project network. C. Every network has only one critical path. D. Some activities on the critical path may have slack. E. The shortest of all paths through the network is the critical path.

Sales Returns Which of the following statements is true relating to the allowance for sales returns?...

Sales Returns Which of the following statements is true relating to the allowance for sales returns? a. Sales returns is treated as an expense in the income statement and, therefore, reduces profit for the period. b. An excess of the amount by which the allowance for sales returns is increased compared with the actual returns for the period indicates the company may have inflated profit for the period. c. The amount by which the allowance for sales returns is reduced...

Which of the following statements are true regarding chemical reactions? T = true and F =...

Which of the following statements are true regarding chemical reactions? T = true and F = false. A) the more negative the ΔG, the further towards completion the reaction will proceed before equilibrium is reached. B) only a system not at equilibrium can perform work. C) for most biochemical reactions in a metabolic pathway, equilibrium is rarely reached. D) in a closed system, a chemical reaction will proceed spontaneously until the reactants and products are in equal concentration.

Which of the following statements is TRUE regarding CAPM? A) This is a model for relating...

Which of the following statements is TRUE regarding CAPM? A) This is a model for relating unsystematic risk to the expected return on a risky asset B) Ceteris paribus, stocks with higher betas should have lower prices. C) The beta for the market is always zero. D) Stocks with higher market risk should have lower expected or required rates of return. Albert purchased Southern Industries stock for $40 per share and sold it one and one half years later for...

3. Which of the following statements regarding liquidity and profitability is not true? a. If a...

3. Which of the following statements regarding liquidity and profitability is not true? a. If a business is unable to pay its debts as they come due, it is operating unprofitably b. In order to survive in the long run, a business must both remain liquid and operate profitably c. A business may operate profitably, yet be unable to meet its obligations d. A business may be liquid, yet operate unprofitably for several years

19. Which of the following is true regarding the value of an option? A) Unlike the...

19. Which of the following is true regarding the value of an option? A) Unlike the Black-Scholes formula, the Put-Call Parity suggests that the volatility of underlying asset is not a factor that affects the value of an option. B) The call and put premiums are unrelated since they depend on different set of variables. C) The writer of the call option pays the same premium as the buyer of the put option. D) When the call option is out-of-the-money...

Which of the following statements regarding t and z distributions is/are true? Correctany false statements to...

Which of the following statements regarding t and z distributions is/are true? Correctany false statements to make them true. A) The area under a t-distribution to the left of -1.97 is greater than the area to the right of 2.17 for a sample of any size. B) The area under the curve (AUC) to the right of t=2.00 when n=15 is smaller than the AUC to the right of t=2.00 when n=50. C) The t-curve has thinner tails and a...

Question