Question

In: Finance

An efficient market has which of the following characteristics? New information causes a quick price change...

  1. An efficient market has which of the following characteristics?

New information causes a quick price change followed by smaller price changes as the market adjusts.

New information causes a large price change followed by price changes in the opposite direction as the market settles down after the news.

New information causes a quick price change followed by random price changes.

New information is reflected in an unbiased manner in stock prices after several days.
  1. What does large stock price increases usually followed by stock price decline indicate?

An inefficient market

A market that is weak-form efficient

A semi-strong-form efficient market

A strong-form efficient market
  1. The expected return on a portfolio depends upon

Only the weight of each asset in the portfolio

Only the expected return of each asset in the portfolio

The probability of profitable investments and the expected return of each asset

The expected return and weight of each asset in the portfolio
  1. You have 25 percent of your funds in Stock A with an expected return of 5 percent, 60 percent of your funds in Stock B with an expected return of 7 percent, and the remainder in Bond C with an expected return of 3 percent. Which of the following is the expected return on this collection of investments closest to?

5.45 percent

5.90 percent

6.20 percent

6.41 percent
  1. Systematic risk is _____________ and unsystematic risk is _____________.

diversifiable, diversifiable

undiversifiable, undiversifiable

undiversifiable, diversifiable

diversifiable, undiversifiable

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Describe the events that occur in an efficient market in response to new information that causes...
Describe the events that occur in an efficient market in response to new information that causes the expected return to exceed the required return. What happens to the market value? Describe, compare, and contrast the following common stock dividend valuation models: (a) zero-growth, (b) constant-growth, and (c) variable-growth.
How can prices change constantly in an efficient market? A. New information changes expected and/or required...
How can prices change constantly in an efficient market? A. New information changes expected and/or required returns requiring traders to buy or sell B. Traders receive information at different times so their trades cause prices to fluctuate C. In an efficient market there are enough traders that everyone has a different idea of what the correct price is, so the price is always moving D. Prices can't change constantly if a market is efficient
Which of the following are causes of evolutionary change?
Part A Which of the following are causes of evolutionary change? Select all that apply. genetic drift natural selection gene flow mutation  Part B Generation-to-generation change in the allele frequencies in a population is ______. mutation natural selection microevolution genetic drift macroevolution
1) Which of the following statements is true? A. A change in the market price can...
1) Which of the following statements is true? A. A change in the market price can only shift the demand curve. B. A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand. C. If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. D. If demand decreases and supply increases one cannot determine if equilibrium price will increase or...
If a firm is facing an exogenously given price, P0, and industry conditions change such that the new market price is P1 > P0, which of the following is true?
1 If a firm is facing an exogenously given price, P0, and industry conditions change such that the new market price is P1 > P0, which of the following is true?a. None of the other options are correct.b. The total revenue curve will become steeper, with an increase in slope on the graph, with dollars on the vertical axis and firm quantity on the horizontal axis.c. The total revenue curve will reach its maximum at a new, higher output than under...
1. If a firm is facing an exogenously given price, P0, and industry conditions change such that the new market price is P1 > P0, which of the following is true?
 1: If a firm is facing an exogenously given price, P0, and industry conditions change such that the new market price is P1 > P0, which of the following is true?a. None of the other options are correct.b. The total revenue curve will become steeper, with an increase in slope on the graph, with dollars on the vertical axis and firm quantity on the horizontal axis.c. The total revenue curve will reach its maximum at a new, higher output than...
3. Which of the following information would provide evidence against the efficient market hypothesis based on...
3. Which of the following information would provide evidence against the efficient market hypothesis based on public information? Circle all that apply (no explanation necessary). i. Mutual fund managers do not on average make superior returns. ii. You can make superior returns by buying stocks after the announcement of an abnormal rise in dividends iii. High Price/Earnings stocks tend to have negative abnormal returns. iv. Stock prices in companies rise on average when it is announced that they are the...
1. If markets are efficient, when new information about a stock becomes available, the price will:...
1. If markets are efficient, when new information about a stock becomes available, the price will: a. remain unchanged because it already reflects this information. b. accurately and rapidly adjust to include this new information. c. adjust to accurately reflect this new information over the course of the next few days. d. most likely increase because all new information has a positive effect on stock prices. 2. Which one of these is included in the yield of a bond with...
In an efficient market ,on average,competition would cause the full effects of new information on intrinsic...
In an efficient market ,on average,competition would cause the full effects of new information on intrinsic values to be reflected 'instantaneously; in actual price.With reference to this statement,explain the central idea of EMH,forms of market efficiency and tools investors may use to try to outperform the market. Subject is Investment Management
THEORY TO PRACTICE On Monday, the owner of Quick Oil Change (“Quick”) has a breakfast meeting...
THEORY TO PRACTICE On Monday, the owner of Quick Oil Change (“Quick”) has a breakfast meeting with the owner of Digital Solutions (“DS”) to discuss DS’s proposal to provide digital consulting services for Quick over a period of two years. The parties discuss price, services to be provided, hardware and software to be purchased, and the timeline to implement the services. When Quick asks DS to lower the price, DS takes out an index card and writes down the following:...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT