Which of the following statement is TRUE? A: In an efficient market, the only way to...
Which of the following statement is TRUE?
A: In an efficient market, the only way to earn higher returns is to invest in riskier securities.
B The efficient market hypothesis means that trades can be executed quickly, easily, and inexpensively.
C In a semi-strong efficient market, traders with non-public information would have no advantage over those who had only public information.
D Even if weak form market efficiency is true, it does not mean that studying charts of past prices and searching for repeating pattern is useless.
Homework Answers
True statement :
In an efficient market, the only means of achieving high returns is to invest in high-risk securities.
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Which of the following statement is TRUE?
A: In an efficient market, the only way to...
1. Which of the following statements regarding the efficient market hypothesis (EMH) is incorrect? A)...
1. Which of the following statements regarding the efficient market hypothesis (EMH) is incorrect? A) An efficient market is a perfect market where you cannot make large profits. B) If the market is efficient in its strong form, it reflects all available, public and private, information. The semi-strong form efficiency means that market prices reflect all publicly available information. A market that only reflects the past price and volume information is a weak-form efficient market.
1. Which of the following statements about the OTC market is true? A. An OTC market...
1. Which of the following statements about the OTC market is true? A. An OTC market is an organized exchange where there is a central trading location. B. OTC security transactions are made on the floor of an exchange by traders. C. Securities that are not listed on an organized exchange are bought and sold on the OTC market. D. Securities that are listed on an organized exchange are bought and sold in the OTC market. 2. Which of the...
Which of the following statements is (are) correct? Multiple Choice If a market is weak-form efficient,...
Which of the following statements is (are) correct? Multiple Choice If a market is weak-form efficient, it is also semi-strong-form and strong-form efficient. 0 If a market is semi-strong-form efficient, it is also strong-form efficient. 0 If a market is not semi-strong-form efficient, it must also be not weak-form efficient. 0 If a market is not strong-form efficient, it must be neither semi-strong-nor weak-form efficient. 0 If a market is not weak-form efficient, it must be neither semi-strong-nor strong-form efficient.
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...
An efficient market hypothesis states in which all public or private information is reflected in current...
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as O semi strong efficiency weak form efficiency strong form efficiency All of the above None of the above answers
Which of the following statement(s) is/are false? I. In an efficient market (strong form efficiency), fundamental...
Which of the following statement(s) is/are false? I. In an efficient market (strong form efficiency), fundamental analysis still provides value to an investor II. Based on the semi-strong form of the efficient market theory, an investor reacting immediately to a news flash on the television generaly cannot make a reasonable profit. III. Retail investors prefer weak form efficiency over strong form efficiency I only O ll only Ill only O 1 & Ill only O None of the above answers
If capital markets are semi-strong form efficient, then: A) individuals can identify mispriced stocks using publicly...
If capital markets are semi-strong form efficient, then: A) individuals can identify mispriced stocks using publicly available information. B) studying past prices will help predict the future performance of a security. C) traders can earn exceptional profits using publicly available information. D) stock analysts have a trading advantage because of their access to vast amounts of public information. E) company insiders can profit based on the inside information.
If the stock market is semi-strong-form efficient, investors can “beat the market” if they A. trade...
If the stock market is semi-strong-form efficient, investors can “beat the market” if they A. trade quickly enough based on recent public information. B. get inside information. C. train monkeys to pick stocks for them. D. perform technical analysis .
Which of the following is TRUE of efficient-market hypothesis? Since stocks are fully and fairly priced,...
Which of the following is TRUE of efficient-market hypothesis? Since stocks are fully and fairly priced, it follows that investors should not waste their time trying to find and capitalize on miss-priced (undervalued or overvalued) securities. Securities are typically in disequilibrium, meaning they are fairly priced and their expected returns are more than their required returns. At any point in time, security prices fully reflect all internal information available about the firm and its securities, and these prices are insensitive...
10.Which one of the following statements is NOT true? Select one: A. The risk that the...
10.Which one of the following statements is NOT true? Select one: A. The risk that the lender may not receive payments as promised is called default risk. B. Investors must pay a premium (a higher price) to purchase a security that exposes them to default risk. C. Australian government securities are assumed not have any default risk and are adopted as the best proxy measure for the risk-free rate. D. The greater the risk of an investment, the greater the...
Which of the following statements is (are) correct? Multiple Choice If a market is weak-form efficient, it is also semi-strong-form and strong-form efficient. 0 If a market is semi-strong-form efficient, it is also strong-form efficient. 0 If a market is not semi-strong-form efficient, it must also be not weak-form efficient. 0 If a market is not strong-form efficient, it must be neither semi-strong-nor weak-form efficient. 0 If a market is not weak-form efficient, it must be neither semi-strong-nor strong-form efficient.
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as O semi strong efficiency weak form efficiency strong form efficiency All of the above None of the above answers
Which of the following statement(s) is/are false? I. In an efficient market (strong form efficiency), fundamental analysis still provides value to an investor II. Based on the semi-strong form of the efficient market theory, an investor reacting immediately to a news flash on the television generaly cannot make a reasonable profit. III. Retail investors prefer weak form efficiency over strong form efficiency I only O ll only Ill only O 1 & Ill only O None of the above answers
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