According to the efficient market, which of the following are not true? Select one: O the market has demonstrated that stocks are not reasonably priced. O None of the answers are correct O securities are in equilibrium the investors should not waste their time on under- or over-valued securities O prices fully reflect all public information available

According to the efficient market, which of the following are not true? Select one: O the market has demonstrated that stocks are not reasonably priced. O None of the answers are correct O securities are in equilibrium the investors should not waste their time on under- or over-valued securities O prices fully reflect all public information available

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

Market neutral bets can result in ______ volatility because hedge funds use ______. Group of answer choices very low; hedging techniques to eliminate risk low; risk management techniques to reduce risk considerable; risk management techniques to reduce risk considerable; considerable leverage none of the above
Which of the following is/are true about the Efficient Markets Hypothesis (EMH) I.The required rate of return on a stock is equal to the expected return II. Stocks are fairly valued III. Stocks are always in equilibrium IV. It is impossible for an investor who does not have inside information to constantly “beat the market”
Stock prices in an inefficient market tend to adjust faster to the new public information. Select one: OTrue O False
The efficient market hypothesis says that Multiple Choice market prices reflect underlying asset values. individual investors should not participate in the financial markets. investors should expect to earn abnormal profits. financial managers can accurately time stock and bond sales. creative accounting can be used to inflate stock prices.
Given that higher-risk investments, such as small-company stocks, have outperformed other investments over time, why don’t all investors choose to invest only in these high-risk securities? (Answer the question correctly and in-depth.)
Statement 1: Fundamental analysis believe that the historical performance of the stocks and markets areindications of future performanceStatement 2: Fundamental analysis works best in determining market sentiment and factor in the creation ofinvestment or trading decisionsStatement 3: Fundamental analysis will succeed if the analyst finds overlooked data in identifying undervaluedsecuritiesStatement 4: Fundamental analysis works best if all investors are logical and could separate emotions frominvestment decision.Statement 5: Fundamental analysis use charts and patterns that can suggest future activity and to measure asecurity’s intrinsic value.a. Only statements 1 and 3 are correct b. Only statements 2 and 4 are correct c. Only statements 1 and 2 are correct d. Only statements 3 and 4 are correct
Which of the following statements about the Efficient Market Hypothesis (EMH) is incorrect? Group of answer choices a)If the market is strong-form efficient, investors can not earn abnormal returns using inside information. b) If the investment in small firms earns a positive abnormal return, the stock market is not semi-strong form efficient. c) If a market is efficient, investors tend to follow a passive investment strategy. d) If the future stock price change depends on its history, the market is not weak-form efficient. e) If a market is weak-form efficient, fundamental analysis can not earn a positive abnormal return.
Which of the statements about the Arbitrage Pricing Theory MUST BE TRUE. I. There is only one systematic risk, the market risk. II. The market risk factor must be one of many systematic risk factors. III. Individual assets may have a positive or negative alpha A. I only B. II only C. III only D. None of the above
1. Which form of market efficiency is the best among weak, semi strong and strong? 2. Is stock market efficient? Give logic in favour of your answer
Which of the following about Treasuy inflation protected securities is NOT true: O Treasury security that is indexed to inflationO Protect investors from the negative effects of inflationO Considered a low-risk investmentO Traded in money market
which of the following statements is true? Select one: Investors sell a stock when required return is less than expected return and buy a stock when required return above expected return None of the answers are correct Investors buy a stock when it is under-valued and sell it when it is over-valued Investors sell a stock when it is under-valued and buy it when it is over-valued.
A Listen An example of the no-arbitrage principle holding would be when all risk-free investments offer investors: A) the same return B) negative returns C) positive returns D) zero return

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