Contact:

Kathy Pitman

Fuqua School of Business

(919) 660-8090

Chris Allen

Financial Executives Institute

(973) 898-4658

FEI/Duke Survey Overview

Sampling Procedure

The survey questionnaire was faxed to 3,200 chief financial officers who are members of Financial Executives Institute. The survey is usually conducted the first or second week of the quarter.

Index Construction for Individual Questions

Financial executives were asked to respond whether they believed that certain key factors would (1) increase, (2) decrease or (3) remain the same over the next quarter and over the next four quarters. We summarize the responses for each variable in an index, which is the percentage of increases minus the percentage of decreases. Thus, an index of 100 means that all respondents felt that there would be an increase in the variable; an index of -100 indicates that all respondents expected a decrease in the variable; and a score of 0 means that there are as many responses of an increase as there are of a decrease or all responses were no change. Our indices measure direction as well as intensity or consensus.

Interpretation of Indexes for Individual Questions

We believe that an index greater than 50 or less than -50 indicates pervasive beliefs or general consensus of the direction of the variable in question.

Earnings

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Capital Investment

.

R&D Expenditures

.

Mergers and Acquisitions

.

Long-Term Debt

R&D and M&A.

Dividends

.

Market Valuation

. Next Quarter vs. Next Year

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FEI/Duke Strength Indices

We compile three composite indices.

• The first, the FEI/Duke Business Strength Index is an average of the questions regarding earnings, dividends, capital investment, employment, mergers and acquisitions and research and development.

• The FEI/Duke Business Financing Index is an average of the questions on long-term debt and equity financing.

• The FEI/Duke Market Valuation Index is focused at the stock valuation question.

Accessing Survey Information

Detailed analysis of the results is contained on the internet at:

www.duke.edu/~jgraham

Each question's responses are broken down into categories according to: firm size by revenues, number of employees, industry, ownership, foreign market exposure and headquarters' location.

This site also contains information on the special questions regarding growth and inflation forecasts.

About FEI

FEI is a leading advocate for the views of corporate financial management. Its 14,000 members hold policy making position as chief financial officers, treasurers, and controllers at 8,000 companies throughout the U.S. and Canada.

About The Fuqua School of Business

The Fuqua School of Business at Duke University, founded in 1970, is recognized world-wide as a leading center of management education and research.

Background Economic Information

Real GDP Growth in 1994= 3.52%

Real GDP Growth in 1995= 1.27%

Real GDP Growth in First Quarter of 1996= 2.15% (Annual Rate)

Inflation (CPI) in 1994= 2.67%

Inflation in 1995= 2.60%

Inflation (CPI) in First Five Months= 4.1% (Annual Rate)