The efficient market hypothesis holds

Assignment Help Financial Management
Reference no: EM13814589

Which of the following statements are true if the efficient market hypothesis holds?

a. It implies that future events can be forecast with perfect accuracy.

b. It implies that prices reflect all available information.

c. It implies that security prices change for no discernable reason.

d. It implies that prices do not fluctuate,

Reference no: EM13814589

Questions Cloud

The bonds yield to maturity : (Year to Maturity) A(n) 8 year bond for Kathy Corporation has a market price of $700.00 and a par value of $1000.00. If the bond has an annual interest rate of 6 percent, but pays interest semi annually, what is the bond's yield to maturity?
Expected return on well-diversified portfolio : Suppose you are working with two factor portfolios, portfolio 1 and portfolio2. The portfolios hace expected returns of 12% and 9%, respectively. Based on this information, what would be the expected return on well-diversified portfolio A, if A has a..
Common stock valuation : Abercrombie & Fitch's common stock pays a dividend of $0.70. It is currently selling for $34.14. If the firm's investors require a return of 10 percent on their investment from buying Abercrombie & Fitch stock, what growth would Abercrombie & Fitch h..
The efficient market hypothesis holds : Which of the following statements are true if the efficient market hypothesis holds?
Indicative of a flexible short-term financial policy : Which one of the following is most indicative of a flexible short-term financial policy?
Find the present value-annual discount interest rate : Find the present value of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate the present value if the $7,000 is received after two years.
Investments future value in terms of purchasing power : You are planning to invest $2,500 today for three years at a nominal interest rate of 9 percent with annual compounding. Now assume that inflation is expected to be 3 percent per year over the same three-year period. What would be the investment's fu..
What is the maximum initial cost : Scanlin, Inc., is considering a project that will result in initial after tax cash savings of $1.76 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. The cost-saving proposal is somewhat r..

Reviews

Write a Review

Financial Management Questions & Answers

  Explain to him the significant tax and nontax issues

One of your best individual clients is thinking about starting up a new business, and he is seeking your advice on which business form he should select. In particular, he's trying to decide whether to operate the business as a partnership or a C corp..

  Compute the profits-losses from the strategy

The trade is performed over one week-How do the results change under these various scenarios? Discuss your results.

  Difference between being unemployed-being out of labor force

What is the difference between being unemployed and being out of the labor force? A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’..

  Purchased a call option contract

You have purchased a call option contract on Smith & Smith common stock. The option contract is for 100 shares. The option has an exercise price of $ 43.00 and S&S’s stock currently trades at $40.00. The option premium is quoted at $ 2.00. If the sto..

  About the callable bonds

Shafer Corporation issued callable bonds. The bonds are most likely to be called if __________

  What is the rate of return on your savings

Your father helped you start saving $20 a month beginning on your 5th birthday. He always made you deposit the money into your savings account on the first day of each month just to "start the month out right." Today completes your 17th year of savin..

  Calculate the groupon campaign profit and loss

A local dental practice decides to run a Groupon campaign. The campaign offered $345 worth of dental services (such as teeth whitening) for $140. For the total campaign, 250 coupons were sold. Calculate the Groupon campaign profit/loss

  Challenges in the capital budgeting process

For a large, multinational corporation like IBM, there are many challenges in the capital budgeting process. This part of the project will use IBM's website (http://www.ibm.com/us)

  Earnings per share are approximately

A stock report contains the following information: P/E 21.4, closing price 28.16, dividend 1.10, net chg .06, and an ask of 28.22 × 300. Which one of the following statements is correct given this information? The stock price has increased by 6 perce..

  Wacc cause changes in irr ranking of mutually projects

If two mutually exclusive projects were being compared, would a high cost of capital favor the longer-term or the shorter-term project? Why? If the cost of capital declined, would that lead firms to invest more in longer-term projects or shorter-term..

  What must the risk-free rate be

A stock has an expected return of 13.3 percent and a beta of 1.19, and the expected return on the market is 12.3 percent. What must the risk-free rate be?

  Recorded and posted to the general ledger

Upon completion of the closing entries, you reviewed the general ledger and noticed that balances remained in all asset, liability, and equity accounts. In addition, there were still balances in the revenue accounts, but not expenses or dividends. Sh..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd