Homework Answers
Correct option: Option 1 - Using insider information one can earn abnormally high reruns from stock
Reason
In Semi-strong form of efficient market hypothesis market adjusts prices of investments almost immediately as information is available.
Option 2 - Financial analysis can be used to earn high returns in weak-from of efficient market hypothesis.
Option 3 - Price and volume information is already priced in into securities, as per weak-from of efficient market hypothesis.
Option 5 - Both public and private, is priced into stocks and that no investor can earn abnormal return according to strong form of efficient market hypothesis.
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Question 23 According to the semi-strong form of efficient market hypothesis: Using insider information one can...
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.
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...
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 .
If markets were semi-strong form efficient, which of the following situations would yield abnormal returns? Analyzing...
If markets were semi-strong form efficient, which of the following situations would yield abnormal returns? Analyzing a company’s earnings report. Identifying a pattern in a company’s stock price. Obtaining insider information. None of the above would yield abnormal returns.
19) According to the efficient market hypothesis, a) Fundamental analysis that generates POSITIVE alpha violates STRONG...
19) According to the efficient market hypothesis, a) Fundamental analysis that generates POSITIVE alpha violates STRONG form efficiency. b) Fundamental analysis that generates POSITIVE alpha violates WEAK form efficiency. c) Fundamental analysis that generates POSITIVE alpha violates SEMI-STRONG form efficiency. d) Both a) and c) are correct. e) Both b) and c) are correct.
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.
investment analysis In the context of the efficient market hypothesis: a) Describe the weak form, the semi-strong fo...
investment analysis
In the context of the efficient market hypothesis: a) Describe the weak form, the semi-strong form and the strong form of capital market efficiency. (9 Marks) b) Which form, if any, do you favor and why? (3 Marks) c) In your opinion, in what form is our Zambian capital market and why. (4 Marks) d) What should be done, if any, to bring it to the form you favour? (4 Marks) [TOTAL: 20 MARKS]
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
QUESTION THREE In the context of the efficient market hypothesis; Describe the weak form, the semi-strong...
QUESTION THREE In the context of the efficient market hypothesis; Describe the weak form, the semi-strong form and the strong form of capital market efficiency. (9 Marks) Which form, if any, do you favor and why? (3 Marks) In your opinion, in what form is our Zambian capital market and why. (4 Marks) What should be done, if any, to bring it to the form you favour? (4 Marks) [TOTAL: 20 MARKS]
investment analysis
In the context of the efficient market hypothesis: a) Describe the weak form, the semi-strong form and the strong form of capital market efficiency. (9 Marks) b) Which form, if any, do you favor and why? (3 Marks) c) In your opinion, in what form is our Zambian capital market and why. (4 Marks) d) What should be done, if any, to bring it to the form you favour? (4 Marks) [TOTAL: 20 MARKS]
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
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