You have observed that the stock price of a company had been declining for 10 executive...
You have observed that the stock price of a company had been declining for 10 executive trading days. Under which of the following circumstances you can expect to act on the observation and make a profit?
Multiple Choice
-
The market is not weak-form efficient.
-
The market is weak-form but not semistrong-form efficient.
-
The market is strong-form efficient.
-
The market is semistrong-form but not strong-form efficient.
Homework Answers
The market is not weak-form efficient
According to Efficient market hypothesis theory, current price of stock already absorbed all the available information and its future price can not be predicted with all this information. Stock price only react to new information. This theory suggested that there are types efficient market.
- weak-form efficient market - Technical analysis not useful which can not predict price by past movements
- semi-strong efficient market - Technical & Fundamental both are not useful to predict price
- strong form efficient market - Even insider information is not useful to predict price
Thus, in above case. if market is not efficient (any form), then only Price can be predicted with past price movement and earn some super profit.
Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.
Add Answer to:
You have observed that the stock price of a company had been
declining for 10 executive...
For each of the following scenarios, discuss whether profit opportunities exist from trading in the stock...
For each of the following scenarios, discuss whether profit opportunities exist from trading in the stock of the firm under the conditions that (1) the market is not weak form efficient, (2) the market is weak form but not semistrong form efficient, (3) the market is semistrong form but not strong form efficient, and (4) the market is strong form efficient. a.The stock price has risen steadily each day for the past 30 days. bThe financial statements for a company...
Someone who invests in the hedge funds could most accurately be described as using which approach?...
Someone who invests in the hedge funds could most accurately be described as using which approach? Multiple Choice Technical management Active management Arbitrage management Passive investment Which of the following contradicts the proposition that the stock market is semistrong-form efficient? Multiple Choice Over 25% of mutual funds outperform the market on average. Insiders earn abnormal trading profits. Applications of technical trading rules fail to earn abnormal returns. Every January, the stock market earns above-normal returns. Assume that a company announces...
My question is Q7 efficient markets hypothesis , thank you . Chapter 12 Some Lessons from...
My question is Q7 efficient markets hypothesis , thank you
.
Chapter 12 Some Lessons from Capital Market History 5. Efficient Marke officient Markets Hypothesis (LO4] A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the average ce for the last 60 days. If this is true, what do you know about the market? emistrong Efficiency (LO4] If a market is semistrong form efficient, is it also price...
Part 18 Attempt 1/3 for 10 pts. If the stock price of a target company jumps...
Part 18 Attempt 1/3 for 10 pts. If the stock price of a target company jumps up when the acquisition of the company is announced, the market cannot be semistrong efficient O is semistrong efficient O cannot be strong form efficient O is strong form efficient
A stock market analyst is able to identify mis-priced stocks by comparing the average price for...
A stock market analyst is able to identify mis-priced stocks by comparing the average price for the last 10 days to the average price for the last 60 days. If this is true, what do you know about the market’s efficiency? Is it Strong, Semi-Strong or Weak form of efficient? (5 points) If a market is semi-strong form of efficient, is it also week form efficient? Explain. (5 points)
Question 31 Your answer is incorrect. Try again. You have observed that every time Toronto Skaters'...
Question 31 Your answer is incorrect. Try again. You have observed that every time Toronto Skaters' Corp. stock falls by 2% in one week, it rises by 8% the next week. What is this observation consistent with? Semi-strong form market efficiency Semi-strong form market inefficiency Weak form market efficiency Weak form market inefficiency
Part Il Multiple chalet Ple a s h poed 1. Which of the following is a...
Part Il Multiple chalet Ple a s h poed 1. Which of the following is a chanc e of market A large number of value-maximizing investors No barriers to trading exist TO Renerally asus slowly at Value Transaction costs are minimal or non-existent Investors should expect to earn fair rates of return on their investments 2. The Efficient Markets Hypothesis Has been proved in all forms Has been proved in the weak form, but not others Has been proved in...
21. Under the P/E model, stock price is a product of: EPS and DPS P/E ratio and EPS EPS and required return P/E rat...
21. Under the P/E model, stock price is a product of: EPS and DPS P/E ratio and EPS EPS and required return P/E ratio and required return Which is not an assumption of the Efficient Market Theory: Investors are rational The current market price reflects all available information about a security Market prices should swing wildly daily Only new unexpected information can change prices 23. Which level of the Efficient Market Theory assumes that non-publie information is reflected in prices:...
True or False: The efficient markets hypothesis holds only if all investors are rational. O True...
True or False: The efficient markets hypothesis holds only if all investors are rational. O True O False Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) returns on their investments. If the markets are efficient, they will react rapidly as new relevant information becomes available. Financial theorists have identified three levels of informational efficiency...
Correctly answer each part of question 7 with answer choices provided. 7. Efficient markets hypothesis Aa...
Correctly answer each part of question 7 with answer choices
provided.
7. Efficient markets hypothesis Aa Aa True or False: The efficient markets hypothesis holds only if all investors are rational. O False O True Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) returns on their investments. If the markets are efficient, they will...
My question is Q7 efficient markets hypothesis , thank you
.
Chapter 12 Some Lessons from Capital Market History 5. Efficient Marke officient Markets Hypothesis (LO4] A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the average ce for the last 60 days. If this is true, what do you know about the market? emistrong Efficiency (LO4] If a market is semistrong form efficient, is it also price...
Part 18 Attempt 1/3 for 10 pts. If the stock price of a target company jumps up when the acquisition of the company is announced, the market cannot be semistrong efficient O is semistrong efficient O cannot be strong form efficient O is strong form efficient
Question 31 Your answer is incorrect. Try again. You have observed that every time Toronto Skaters' Corp. stock falls by 2% in one week, it rises by 8% the next week. What is this observation consistent with? Semi-strong form market efficiency Semi-strong form market inefficiency Weak form market efficiency Weak form market inefficiency
Part Il Multiple chalet Ple a s h poed 1. Which of the following is a chanc e of market A large number of value-maximizing investors No barriers to trading exist TO Renerally asus slowly at Value Transaction costs are minimal or non-existent Investors should expect to earn fair rates of return on their investments 2. The Efficient Markets Hypothesis Has been proved in all forms Has been proved in the weak form, but not others Has been proved in...
21. Under the P/E model, stock price is a product of: EPS and DPS P/E ratio and EPS EPS and required return P/E ratio and required return Which is not an assumption of the Efficient Market Theory: Investors are rational The current market price reflects all available information about a security Market prices should swing wildly daily Only new unexpected information can change prices 23. Which level of the Efficient Market Theory assumes that non-publie information is reflected in prices:...
True or False: The efficient markets hypothesis holds only if all investors are rational. O True O False Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) returns on their investments. If the markets are efficient, they will react rapidly as new relevant information becomes available. Financial theorists have identified three levels of informational efficiency...
Correctly answer each part of question 7 with answer choices
provided.
7. Efficient markets hypothesis Aa Aa True or False: The efficient markets hypothesis holds only if all investors are rational. O False O True Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) returns on their investments. If the markets are efficient, they will...
Most questions answered within 3 hours.
-
Go to NCBI BLAST search web page
1st search: GEKDLRRAKDINQEVYNF
2nd search: PTSQRLQLLEPFDK
3rd search: GEKDLRRAKDINQEVYNF...
asked 45 seconds ago -
Explain how each of the following three conditions could be a
red flag for a register...
asked 5 minutes ago -
In a two-way factorial ANOVA, the final F-ratio for
factor AxB is determined by dividing _____...
asked 35 minutes ago -
Show your solutions for answer.
4. An aqueous solution contains 9.21 g of
K4Fe(CN)6 in a...
asked 5 minutes ago -
The random variable X has a uniform distribution with values
between 16 and 18. What is...
asked 15 minutes ago -
Evaluate each of the following transactions in terms of their
effect on assets, liabilities, and equity....
asked 14 minutes ago -
The amounts of nicotine in a certain brand of cigarette are
normally distributed with a mean...
asked 34 minutes ago -
The commercial lending department of First Bank made a
substantial loan to Alpha Company after obtaining...
asked 20 minutes ago -
For a reaction, reagents --->products, it's forwarding rate
(rate of products formation) is proportional to the...
asked 33 minutes ago -
5)
Typically,
there will need to be a rather high degree of coordination and
interaction among...
asked 29 minutes ago -
if the marginal revenue on each MRI is $2500, and the
marginal cost for each is...
asked 30 minutes ago -
What did Butler and Hobbes contribute to our understanding of
utilitarianism?
asked 35 minutes ago