MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)
8th Edition
ISBN: 9781337096591
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 6CQQ
To determine
Concept based on efficient market hypothesis.
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According to the efficient markets hypothesis,a. changes in stock prices are impossible to predict from publicinformation.b. excessive diversification can reduce an investor's expected portfolioreturns.c. the stock market moves based on the changing animal spirits ofinvestors.d. actively managed mutual funds should give higher returns than indexfunds.
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According to the efficient markets hypothesis,a. excessive diversification can reduce an investor’sexpected portfolio returns.b. changes in stock prices are impossible to predictfrom public information.c. actively managed mutual funds should generatehigher returns than index funds.d. the stock market moves based on the changinganimal spirits of investors
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MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)
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- Which type of financial intermediary provides individual investors with professional management of their money and diversification in order to limit the risk of investing? A. mutual funds B. insurance companies C. hedge funds D. investment banksarrow_forwardwhich one is correct? According to the semistrong-form efficient market hypothesis, which of the following types of information are fully reflected in stock prices? a. dividend and earnings announcements b. earnings announcements and rates of return c. rates of return, trading volume, and news about the economy d. All of these are correct. e. rates of return, trading volume, and block tradesarrow_forwardThe main advantage of mutual funds is that theyprovidea. a return insured by the government.b. an easy way to hold a diversified portfolio.c. an asset that is widely used as the medium ofexchange.d. a way to avoid fluctuations in stock and bondprices.arrow_forward
- I. When people buy stock, is there a guarantee that they will receive dividends or that they will be able to sell the stock at a price higher than the price they paid for it? J. If there is no guarantee, why are people willing to buy stock?arrow_forward19. Which is the correct bar chart if the stock's opening price is PI5, closing price is P25, highest price is P30, and lowest price is P10? a. d.arrow_forwardIdentify the following numbers whether it is a "BOND" or "STOCK"arrow_forward
- Which of the following is a difference between stocks and bonds? A. Stocks are issued for a fixed period; bonds are not.B. Stocks pay interest; bonds pay dividends.C. Bond payouts are more predictable than payouts from stocks.D. Bonds represent ownership; stocks represent debt.arrow_forwardPLS HELP ASAParrow_forwardExplain the implication of conservatism considering that majority of investors are emotional.arrow_forward
- 7. Why the price elasticities of demand and supply are very important? If there is a property investor which of the two markets should they choose and why? Which market is more risky? 8. A simple stock flow model - quick adjustment of rents discuss how the stock model operates if an exogenous factor affects the market.arrow_forwardStocks and bonds are examples of: a) natural resources. b) financial capital. c) physical capital. d) financial labor. e) internal capital. ?arrow_forwardWhich of the following is TRUE about bonds? *a. If the bond price is greater than its par value, the bond is discounted.b. None of the choices.c. If the bond price is greater than its par value, the bond is traded at a premium.d. Coupon rates are always higher than the market rate.arrow_forward
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