If market is efficient , identify whether the statement belongs to positive, normative or art of economies.

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

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Suppose that a random sample of 216 twenty-year-old men is selected from a population and that their heights and weights are recorded. A regression of weight on height yields Weight = (-107.3628) + 4.2552 x Height, R2 = 0.875, SER = 11.0160 (2.3220) (0.3348) where Weight is measured in pounds and Height is measured in inches. A man has a late growth spurt and grows 1.6200 inches over the course of a year. Construct a confidence interval of 90% for the person's weight gain. The 90% confidence interval for the person's weight gain is ( ☐ ☐) (in pounds). (Round your responses to two decimal places.)

Suppose that (Y, X) satisfy the assumptions specified here. A random sample of n = 498 is drawn and yields Ŷ= 6.47 + 5.66X, R2 = 0.83, SER = 5.3 (3.7) (3.4) Where the numbers in parentheses are the standard errors of the estimated coefficients B₁ = 6.47 and B₁ = 5.66 respectively. Suppose you wanted to test that B₁ is zero at the 5% level. That is, Ho: B₁ = 0 vs. H₁: B₁ #0 Report the t-statistic and p-value for this test. Definition The t-statistic is (Round your response to two decimal places) ☑ The Least Squares Assumptions Y=Bo+B₁X+u, i = 1,..., n, where 1. The error term u; has conditional mean zero given X;: E (u;|X;) = 0; 2. (Y;, X¡), i = 1,..., n, are independent and identically distributed (i.i.d.) draws from i their joint distribution; and 3. Large outliers are unlikely: X; and Y, have nonzero finite fourth moments.

Answer 2

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

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Answer 4

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

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Answer 5

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

Answer 6

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

Answer 7

Chapter 1.1, Problem 10Q

(a)

To determine

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

Answer 8

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

Answer 9

(b)

To determine

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

Answer 10

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

Answer 11

(c)

To determine

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

Answer 12

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

Answer 13

(d)

To determine

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

Answer 14

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

Answer 15

(e)

To determine

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 1.1 - Prob. 1Q Ch. 1.1 - Prob. 2Q Ch. 1.1 - Prob. 3Q Ch. 1.1 - Prob. 4Q Ch. 1.1 - Prob. 5Q Ch. 1.1 - Prob. 6Q Ch. 1.1 - Prob. 7Q Ch. 1.1 - Prob. 8Q Ch. 1.1 - Prob. 9Q Ch. 1.1 - Prob. 10Q

If market is efficient , identify whether the statement belongs to positive, normative or art of economies.

Solution Summary: The author identifies whether the statement belongs to positive, normative, or art of economies. Positive economic concerns the description and explanation of economic phenomena.

Concept explainers

If market is efficient, identify whether the statement belongs to positive, normative or art of economies.

If market achieves efficient results, identify whether the statement belongs to positive, normative or art of economies.

Identify if one wants a reasonably efficient result, market should probably be relied on, whether this statement belong to positive, normative or art of economies.

Identify whether distribution of income should be left to markets, and whether the statement belongs to positive, normative or art of economies.

Identify ‘the market allocates income according to contributions of factors of production’ whether the statement belongs to positive, normative or art of economies.

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Chapter 1 Solutions