What impact on the price of the stock can be expected in an efficient market when the company announces large dividend payout Introduction: Abnormal return refers to the term that is taken into consideration to portray the return ascertained from a portfolio or security over a particular time period which stands different from the rate of return expected out of such portfolio.

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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 11, Problem 2CP

Summary Introduction

To determine:

What impact on the price of the stock can be expected in an efficient market when the company announces large dividend payout

Introduction:

Abnormal return refers to the term that is taken into consideration to portray the return ascertained from a portfolio or security over a particular time period which stands different from the rate of return expected out of such portfolio.

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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 11, Problem 2CP

Summary Introduction

To determine:

What impact on the price of the stock can be expected in an efficient market when the company announces large dividend payout

Introduction:

Abnormal return refers to the term that is taken into consideration to portray the return ascertained from a portfolio or security over a particular time period which stands different from the rate of return expected out of such portfolio.

Expert Solution & Answer

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Check out a sample textbook solution

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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 11, Problem 2CP

Summary Introduction

To determine:

What impact on the price of the stock can be expected in an efficient market when the company announces large dividend payout

Introduction:

Abnormal return refers to the term that is taken into consideration to portray the return ascertained from a portfolio or security over a particular time period which stands different from the rate of return expected out of such portfolio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 11, Problem 2CP

Summary Introduction