Mean reversion refers to the tendency for
A) futures prices to revert to the prices of the underlying securities.
B) the long-run mean return on stocks to equal the long-run mean return on bonds.
C) stocks with high returns today to experience low returns in the future and for stocks with low returns today to experience high returns in the future.
D) financial analysts whose stock picks have earned above-normal returns in the past to be unable to pick stocks that will perform as well in the future.
C
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The best threat is on
a. You always have to carry out b. You must always carry out c. You sometimes have to carry out d. You never have to carry out
Refer to the information provided in Table 36.2 below to answer the question(s) that follow. Table 36.2 PointAggregate Income (Y)Aggregate Consumption (C) A 10 14 B 20 23 C 30 25 D 40 26 E 50 34 F 60 39The data in the table was used to estimate the following consumption function: C = 12 + 0.4YRefer to Table 36.2. Which of the following points is (are) the worst fit for the given consumption function?
A. A and D B. B and F C. C D. E