Homework Answers
option d is inaccurate since the efficient market approach is considered to be accurate way (than fundamental models)
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Which one of the following about the efficient market approach is inaccurate? d. The predictions are...
Which of the following statements regarding the efficient market hypothesis is NOT accurate? Select one: a....
Which of the following statements regarding the efficient market hypothesis is NOT accurate? Select one: a. The strong form state prices reflect all information, including public and private b. Semi strong form Implies that fundamental analysis will not lead to abnormal returns c. If the market is weak form efficient, then investors can earn abnormal returns by trading on market information d. Strong form Implies that technical analysis will not lead to abnormal returns e. All of the answers are...
15. Which one of the following statements best defines the efficient market hypothesis? A. Efficient markets...
15. Which one of the following statements best defines the efficient market hypothesis? A. Efficient markets limit competition. B. Security prices in efficient markets remain steady as new information becomes available. C. Mispriced securities are common in efficient markets. D. All securities in an efficient market are zero net present value investments. E. Profits are removed as a market incentive when markets become efficient. 16.A news flash just appeared that caused about a dozen stocks to suddenly drop in value...
Which one of the following is a wise and effective approach to cost-cutting that will aid...
Which one of the following is a wise and effective approach to cost-cutting that will aid company efforts to achieve a competitive advantage based on lower overall costs per pair sold than rival companies? a. delivering orders to footwear retailers in 4 weeks b. employing a strategy to be the market share leader in selling branded footwear in each geographic region c. making sure that the company's total compensation costs for production workers and supervisors are always the industry-low in...
/Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can...
/Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can be used to arbitrage and achieve excess return. b) Derivatives have high real value certainty. c) Derivatives are not always more liquid than their underlying basic securities.X d) Derivatives are designed to provide higher returns as compensation to high risk
4.Which one of the following statements about the approach to bond pricing is NOT true? Select...
4.Which one of the following statements about the approach to bond pricing is NOT true? Select one: A. To calculate a bond's price, one needs to calculate the present value of the bond's expected cash flows. B. The value, or price, of any asset is the future value of its cash flows. 6.Which one of the following statements is NOT true? Select one: A. The yield to maturity of a bond is the discount rate that makes the present value...
If you believe the market is not semi-strong form efficient or strong form efficient, you should...
If you believe the market is not semi-strong form efficient or strong form efficient, you should engage in which of the following? A.Trade stocks base on insider information B. Conduct fundamental analysis to find undervalued stocks C. Read stock price charts D. Trade on insider information and conduct fundamental analysis E. Buy market index mutual funds.
Are predictions using the supply-and-demand model likely to be reliable in each of the following markets?...
Are predictions using the supply-and-demand model likely to be reliable in each of the following markets? Why or why not? Predictions using the supply-and-demand model for the apple market are likely A. not reliable because consumers have full information about apple prices. B. reliable because apple farmers sell differentiated products. C. reliable because the market for apples has many farmers and consumers. D. not reliable because apples have no transaction costs E. not reliable because the cost of trading apples...
Which of the following statements about cost-of-equity estimation is most correct? A) The CAPM approach is...
Which of the following statements about cost-of-equity estimation is most correct? A) The CAPM approach is always superior to the DCF approach. B) The risk premium used in the debt-cost-plus-risk-premium approach is the same as the risk premium used in the CAPM approach. C) Because the CAPM and DCF approaches use market data, they provide precise cost-of-equity estimates. D) The debt-cost-plus-risk-premium approach can be used when the business does not have publicly traded equity. E) All approaches always produce estimates...
1) Suppose a manager earns a positive alpha for a year of investing. Efficient market hypothesis explains this as: A. the manager got lucky. B. the manager took high risk. C. both (A) and (B) are true...
1) Suppose a manager earns a positive alpha for a year of investing. Efficient market hypothesis explains this as: A. the manager got lucky. B. the manager took high risk. C. both (A) and (B) are true. D. none of the above 2) Suppose a manager earns a positive alpha for a year of investing. Efficient market hypothesis explains this as: A. the manager got lucky. B. the model of risk which produced the result was flawed or incomplete. C....
Which of the following most appears to contradict the proposition that the stock market is weakly...
Which of the following most appears to contradict the proposition that the stock market is weakly efficient? A. Stocks with low book-to-market have lower returns. B. Investments in stock of less well-known firms are likely to generate abnormal returns. C. Hedge funds that outperform the market in one year are likely to outperform in the following year. D. Insiders earn abnormal trading profits.
15. Which one of the following statements best defines the efficient market hypothesis? A. Efficient markets limit competition. B. Security prices in efficient markets remain steady as new information becomes available. C. Mispriced securities are common in efficient markets. D. All securities in an efficient market are zero net present value investments. E. Profits are removed as a market incentive when markets become efficient. 16.A news flash just appeared that caused about a dozen stocks to suddenly drop in value...
/Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can be used to arbitrage and achieve excess return. b) Derivatives have high real value certainty. c) Derivatives are not always more liquid than their underlying basic securities.X d) Derivatives are designed to provide higher returns as compensation to high risk
Are predictions using the supply-and-demand model likely to be reliable in each of the following markets? Why or why not? Predictions using the supply-and-demand model for the apple market are likely A. not reliable because consumers have full information about apple prices. B. reliable because apple farmers sell differentiated products. C. reliable because the market for apples has many farmers and consumers. D. not reliable because apples have no transaction costs E. not reliable because the cost of trading apples...
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