1. An investment...
-is acceptable if its calculated payback period is less than some prespecified period of time.
-should be accepted if the payback is positive and rejected if it is negative.
-should be rejected if the payback is positive and accepted if it is negative.
-is acceptable if its calculated payback period is greater than some prespecified period of time.
-should be accepted any time the payback period is less than the discounted payback period, given a positive discount rate.
2. Serial correlation
-indicates a reversal in the direction of returns when the coefficient is positive.
-involves the relationship of one stock’s returns over various time periods.
-indicates a tendency toward reversal when its coefficient is positive.
-measures the cumulative difference between the returns on two similar securities.
-measures the current relationship between the returns on two securities.