Excess profits based on the analysis of historical price

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Reference no: EM131360815

1. Investors cannot earn excess profits based on the analysis of historical price information. We say that the financial markets are:

strong form efficient.

weak form efficient.

not efficient at any level.

semistrong form efficient.

2. Stock A has an expected return of 16 percent and a beta of 1.4. Stock B has an expected return of 11 percent and a beta of 0.8. Both stocks have the same reward-to-risk ratio. What is the risk-free rate?

2.13 percent

3.26 percent

1.27 percent

4.33 percent

Reference no: EM131360815

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