Computers ensure public knowledge is instantly embodied

Assignment Help Business Economics

Reference no: EM13831169

1) A real return of 10% per year means that a $10,000 investment will grow to $20,000 in:

A. 10 years.

B. 7 years.

C. 15 years.

2) High-frequency trading involves scanning the latest news and stock quotes with high-tech computers and using the information to trade stocks very quickly. Because it is highly automated, it happens a thousand times faster than an eye can blink. Though each trade might make a fraction of a penny, it accounts for about two-thirds of the stock market trading. How does this financing trend reflect the efficient markets hypothesis?

A. Investing in stocks this way has a low risk of failure, thus a low return.

B. Computers ensure public knowledge is instantly embodied in the stock price.

C. Buying and holding stocks allows the investor to circumvent this volatility.

Reference no: EM13831169

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