Statements about efficient markets

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Reference no: EM132050988

1. Two years ago, you invested $1,800 in a healthcare stock. Your return during the first year was -50 percent, while your return in the second year was +50 percent. Your investment is now (at the end of two years) worth less than $1,000.

A. True

B. False

2. What is the value of a 8 percent annual coupon, $1,000 par value bond with 20 years to maturity if the required rate of return on the bond is 10 percent?

A. $928.45

B. $849.46

C. $850.61

D. $767.83

E. $829.73

3. Which of the following statements about efficient markets is(are) most correct?

A. Future prices reflect forecasted information.

B. The market for real assets is considered an efficient market.

C. Not all markets are efficient. For example, the market for real assets is not efficient.

D. a and c

E. All of the above statements are correct.

Reference no: EM132050988

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