Which of the following is a characteristic of an efficientfinancial market?a, Absence of underpriced...

Which of the following is a characteristic of an efficient financial market?

a, Absence of underpriced or overpriced securities

b, Abundance of bargain opportunities

c, Necessity of active portfolio management

d, Focus on security analysis

Expert Solution

Answer-Absence of underpriced or overpriced securities

In the case of an efficient market, since all the information is already reflected in the stock prices; thus, there are no underpriced or overpriced securities.Since the securities are correctly priced, so bargain opportunities are not there. Also active portfolio management will be a waste of time and money, thus passive management is preferred. Also, since there are no underpriced or overpriced securities, security analysis, will also be of mostly no benefit.

jeff jeffy answered 2 years ago

Which of the following is NOT a characteristic of a perfectly competitive market? A. An individual...

Which of the following is NOT a characteristic of a perfectly competitive market? A. An individual producer can lower the market price if it is advantageous for him/her B. Suppliers are price takers C. Neither producers nor consumers are price takers D. Demanders are price takers.

Which of the following is characteristic of metals? Which of the following is characteristic of insulators?...

Which of the following is characteristic of metals? Which of the following is characteristic of insulators? Which of the following is characteristic of semiconductors? Match each of the following answers: Large number of carriers independent of temperature, and low electron mobility that decreases with increasing temperature. Intermediate number of carriers independent of temperature, and high electron mobility that decreases with increasing temperature Near zero conductors, no real mobility estimates and near zero conductivity. None of the above.

Q5 - Which of the following is NOT a characteristic of a monopolistically competitive market? 1-...

Q5 - Which of the following is NOT a characteristic of a monopolistically competitive market? 1- There are many firms. 2- Firms sells differentiated products. 3- Firms have control over price. 4- There are substantial barriers to entry. Q6 - The perfectly competitive firm’s short-run supply curve is the part of the firm’s : 1. Short-run average cost curve above the marginal cost. 2. Short-run marginal cost curve above the shut-down price. 3. Short-run average variable cost curve above the...

Which of the following is a characteristic of carbohydrates?

Which of the following is a characteristic of carbohydrates? A) Energy source for animals B) Consists of sugars and sugar polymers C) A structural component in plants D) All of the above are characteristic of carbohydrates

which of the following is not a characteristic of a commodity the demand for which is...

which of the following is not a characteristic of a commodity the demand for which is elastic

Which of the following is not a characteristic for a normal distribution? a. It is a...

Which of the following is not a characteristic for a normal distribution? a. It is a symmetrical distribution b. The mean is always zero c. The mean, median, and mode are all equal d. It is a bell-shaped distribution e. The area under the curve always equals 1.0

1. Which is characteristic of a perfectly competitive market: A) THere are many firms in the...

1. Which is characteristic of a perfectly competitive market: A) THere are many firms in the market b) It is easy to enter/exit the industry c) Every firm has a small market share in the industry d) Information on prices are easily accessible e) All of the above 2. The perfeclty competitive firm reaches a break even point when: a) price=total cost b)price=minimum average total cost c) price=maximum average total cost d) price=minimum average variable cost e)price=maximum average variable cost...

Which of the following is likely to reduce the impact of a monopsony? a. Absence of...

Which of the following is likely to reduce the impact of a monopsony? a. Absence of competing firms b. Higher search costs c. An increased ability of workers to relocate elsewhere d. Higher movement and information costs

If a security is underpriced (i.e. intrinsic value > market price), then what is the relationship...

If a security is underpriced (i.e. intrinsic value > market price), then what is the relationship between its market capitalization rate (k) and its expected rate of return (EHPR)? Briefly explain your answer. (if you can point out all of the points needed to answer this so I can turn that into 400 words) [For this theoretical sub-question a word limit of 400 word is required.]

1. Explain and discuss if an asset is overpriced or underpriced on a Security Market Line...

1. Explain and discuss if an asset is overpriced or underpriced on a Security Market Line and how you make the decision? 2. Explain and discuss the difference between Security Market Line and Capital Market Line

Question