1. Violate
2. Violate
3. Violate
4. Consistent
Efficient market hypothesis (EMH) is a theory in financial economics which states that assets prices adopts all the available information immediately and it is impossible to beat the market. If market is efficient then all technical and fundamental analysis is useless even benefits from insider trading is not possible.
There are three form of EMH, Strong, Semi-strong and weak.
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
1. For question 1 to 4 below, which of the following phenomena would violate or be consistent with the Efficient marke...
Note whether the following phenomena would be consistent with or a violation of the efficient market hypothesis. a. Nearly half of all professionally managed mutual funds are able to outperform the S&P 500 in a typical year. Consistent Violation b. Money managers that outperform the market (on a risk-adjusted basis) in one year are likely to outperform in the following year. Consistent Violation c. Stock prices tend to be predictably more volatile in January than in other months. Consistent Violation...
7. If you actively seek bargains in an efficient market, what would you expect see as the returns on your portfolio, relative to the market, over long periods? (3 points) You should earn a higher risk-adjusted return than the market You should earn the same risk-Cadjusted return as the market before transactions costs a b. c You should earn higher risk-Cadjusted return than the market before d You should earn lower risk-Cadjusted return than the market before transactions costs, but...
Hello, are you able to help with the multi question? 1) A) Which of the following statements is false? Even the best portfolio managers sometimes make mistakes. Investors purchase mutual funds for diversification. Investors purchase mutual funds because of professional management. Investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds. Professional mutual fund managers work for an investment company. B) Which of the following statements is true? Mortgage funds...
a)Consider each statement independently. Which of the statements would likely be consistent with the semi-strong form of EMH? [I] Stocks that issue a stock split tend to experience positive abnormal returns in the period (1 year) before the public split announcement. [II] Stocks that issue a stock split tend to experience positive abnormal returns in the 1 year after the public split announcement. b)Which of the following statement is NOT a violation of any form of the Efficient Market Hypothesis?...
Part 1 Attempt 1/4 for 10 pts. Which of the following statements are inconsistent with the efficient market hypothesis? Check all that apply: The average annual return on stocks is greater than zero. Stocks that outperform the index in March always underperform it in April. Half of fund managers are able to beat their relevant index each year, before fees. Stocks that outperform the index in March always outperform it in April. Submit
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...
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....
CDs are a very safe investment because they are usually insured by the U.S. government. (There are some CDs that are not insured so it is important to always check!) Because they are so safe, CDs earn low rates of interest. The amount earned on an investment is often called the return. In general, investments with higher risk also have the potential for higher rates of return. For example, if you invest in a stock, which is like buying a...
Problem 2 Part 1 Other things equal, which of the following bonds has the highest interest rate risk? (Hint: you do not need to do any calculation, just do pair-wise comparisons to determine which one is more sensitive to interest rate changes.) A. A 10-year, 10% coupon bond issued by the US Department of the Treasury. B. A 10-year, 20% coupon bond issued by the US Department of the Treasury. CHA 10-year, 20% coupon bond issued by Microsoft. D. A...
Question 16 (1 point) The economy has been in a recession, but seems to be recovering. Ebeling Inc.'s stock just paid a dividend of $3.1. The company's dividend is expected to grow at a ra te of -0.01 this year, 0.04, next year, and 0.05 for every year after that. If Ebeling has a required rate of return of 0.14, what is the current value of Ebeling's the stock? Your Answer: :Answer Question 17 (1 point) In most cases actively...