5. By using moving average (a technique based on past/historical prices), you continue to earn higher...
5. By using moving average (a technique based on past/historical prices), you continue to earn higher than normal return. Does it violate EMH, if yes, which form (strong, semi-strong, strong)?
Homework Answers
Yes, it violates EMH and as technical analysis can give advantage so it violates weak form Efficient Market Hypothesis.
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5. By using moving average (a technique based on past/historical prices), you continue to earn higher...
6. Based on earning announcements of firms’ annual results, you find it hard to earn abnormal...
6. Based on earning announcements of firms’ annual results, you find it hard to earn abnormal return. Is it consistent with EMH? If yes, which form of EMH (strong, semi-strong, strong)?
1. For question 1 to 4 below, which of the following phenomena would violate or be consistent with the Efficient marke...
1.
For question 1 to 4 below, which of the following phenomena would violate or be consistent with the Efficient market hypothesis (EMH)? You need to put down "Consistent" or "Violate" only for each question. No explanation required. 1. Half of the mutual fund managers outperformed the market for the past 5 years. 2. Your investment earned 80% return last year. 3. By applying technical analysis, you continue to earn higher than the market after adjusting for the risk. 4....
You are to estimate a stock’s annualized volatility using its prices in the past 5 months....
You are to estimate a stock’s annualized volatility using its prices in the past 5 months. Month Price 1 100 2 110 3 112 4 105 5 113 Find the historical volatility for this stock.
Problem 2 Part 1 Other things equal, which of the following bonds has the highest interest...
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...
Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1...
Visit the NASDAQ historical prices weblink. First, set the date
range to be for exactly 1 year ending on the Monday that this
course started. Use March 18, 2018 – March 19, 2019. Do this by
clicking on the blue dates after “Time Period”. Next, click the
“Apply” button. Next, click the link on the right side of the page
that says “Download Data” to save the file to your computer.
This project will only use the Close values. Assume...
Attempts: 0 Average: 12 5. The probabilistic approach to calculate expected returns Investors are willing to...
Attempts: 0 Average: 12 5. The probabilistic approach to calculate expected returns Investors are willing to make investments because they expect a return from doing so. As the name suggests, expected returns are not assured. Because they occur in the future, expected returns cannot be observed either, so stock analysts substitute historical realized returns in their mathematical analyses. Realized return is the name for returns that have actually been earned. Many analysts use past realized returns to both predict future...
Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year en...
Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on April 1, 2018, then use April 1, 2017 – March 31, 2018. (Do NOT use these dates. Use the dates that match up with the current term.) Do this by clicking on the blue dates after “Time Period”. Next, click the “Apply” button. Next, click the link...
Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year en...
Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on April 1, 2018, then use April 1, 2017 – March 31, 2018. (Do NOT use these dates. Use the dates that match up with the current term.) MY DATES ARE MARCH 18 2018 - MARCH 19 2019 Do this by clicking on the blue dates after “Time...
1. Stock prices and stand-alone risk The S&P 500 Index is one of the most commonly...
1. Stock prices and stand-alone risk The S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companies, it is a market value-weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio...
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....
1.
For question 1 to 4 below, which of the following phenomena would violate or be consistent with the Efficient market hypothesis (EMH)? You need to put down "Consistent" or "Violate" only for each question. No explanation required. 1. Half of the mutual fund managers outperformed the market for the past 5 years. 2. Your investment earned 80% return last year. 3. By applying technical analysis, you continue to earn higher than the market after adjusting for the risk. 4....
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...
Visit the NASDAQ historical prices weblink. First, set the date
range to be for exactly 1 year ending on the Monday that this
course started. Use March 18, 2018 – March 19, 2019. Do this by
clicking on the blue dates after “Time Period”. Next, click the
“Apply” button. Next, click the link on the right side of the page
that says “Download Data” to save the file to your computer.
This project will only use the Close values. Assume...
Attempts: 0 Average: 12 5. The probabilistic approach to calculate expected returns Investors are willing to make investments because they expect a return from doing so. As the name suggests, expected returns are not assured. Because they occur in the future, expected returns cannot be observed either, so stock analysts substitute historical realized returns in their mathematical analyses. Realized return is the name for returns that have actually been earned. Many analysts use past realized returns to both predict future...
1. Stock prices and stand-alone risk The S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companies, it is a market value-weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies. Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio...
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