A stock market analyst is using a exponential smoothing and wanting to give a quick read out on a stock their firm is looking to invest in. The analyst finds that their last predicted closing price on the stock was below the actual price. What should the analyst know about their next prediction on the closing price of the stock? their next forecast will be less than the actual price their next forecast will be more than their latest prediction. O their next forecast will be greater than the actual price O their next forecast will be less than their latest prediction.

A stock market analyst is using a exponential smoothing and wanting to give a quick read out on a stock their firm is looking to invest in. The analyst finds that their last predicted closing price on the stock was below the actual price. What should the analyst know about their next prediction on the closing price of the stock? their next forecast will be less than the actual price their next forecast will be more than their latest prediction. O their next forecast will be greater than the actual price O their next forecast will be less than their latest prediction.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A stock has not been fluctuating much in price. Its average price is $20/share. You expect that the stock price behaves the same way in the next year. A one-year put option is selling for $5, which has an exercise price of $20. Suppose the risk-free rate is 0.05. To make use of your expectation in the future price movement, you establish a straddle strategy to maximize your profits. If the stock price actually ends up at $20 in a year, your profit is $ . Give your answer to 2 decimal places.
If the current price of a stock is $30, and you believe that price changes follow a random walk, what is your best estimate for the expected price tomorrow. A) 0 B) 25 C) 30 D) 35 E) 40
Suppose that during the coming year, the risk free rate, rRF, is expected to remain the same, while the market risk premium (rM − rRF), is expected to fall. Given this forecast, which of the following statements is CORRECT? a. The required return on all stocks will remain unchanged. b. The required return will fall for all stocks, but it will fall more for stocks with higher betas. c. The required return for all stocks will fall by the same amount. d. The required return will fall for all stocks, but it will fall less for stocks with higher betas. e. The required return will increase for stocks with a beta less than 1.0 and will decrease for stocks with a beta greater than 1.0.
E2
If markets are efficient then: All stocks will have the same expected returns All stocks will have the same risk Two stocks will the same volatility will have the same expected returns Two stocks with the same priced risks will have the same expected returns
What is the required return for each stock? What is required return for stock B? Scenario Probability Stock A Stock B Market Risk-free rate Bust 0.25 -0.15 -0.05 Normal 0.55 0.2 0.1 Boom 0.2 0.4 0.3 Beta 1.2 0.9 Expected return 0.13 0.05
A stock analyst at PJ Brokers estimates that the beta of stock ZLX is close to two (2.0). Therefore, ZLX will have an expected return that is: A) about equal to the risk-free rate B) about equal to the market expected return C) expected to exceed the market expected return
Solve this practice problem in the 2 pictures below
Which of the following stocks is a better buy? What is the difference between expected return and required return for the best stock? Scenario Probability Stock A Stock B Market Risk-free rate Bust 0.25 -0.15 -0.05 Normal 0.55 0.2 0.1 Boom 0.2 0.4 0.3 Beta 1.2 0.9 Expected return 0.13 0.05
Which one of the following statements is correct? When more stocks are added into a portfolio, the beta of that portfolio will a) always decrease. The beta of ABC and XYZ is 1.95 and 0.88, respectively. This information b) implies that ABC has less market risk than XYZ. A stock has a beta of 1.5. It implies that this stock has lower total risk than c) the overall market. The beta of ABC and XYZ is 1.95 and 0.88, respectively. This information implies that ABC has higher total risk than XYZ. The risk premium investors demand from a stock will increase as the beta of the stock increases.
Consider the following table, which gives a security analyst’s expected return on two stocks and the market index in two scenarios: Scenario Probability Market Return Aggressive Stock Defensive Stock 1 0.5 6% 2.0% 5.0% 2 0.5 20 32 15 If the T-bill rate is 7%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)
you are an investor who wants to express a long bias in stock XYZ between now and June expiration. You think the stock will finish above $125, but not go above $130. Which option strategy would get you long delta and be the best one to use to give your outlook?

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