If a stock market is utilizing all of the available information on earnings projections, interest rates, risk, etc., economists refer to the market as A- proper B- attentive C- efficient D- Fully engaged

If a stock market is utilizing all of the available information on earnings projections, interest rates, risk, etc., economists refer to the market as A- proper B- attentive C- efficient D- Fully engaged

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter31: Capital Markets

Section: Chapter Questions

Problem 12E

See similar textbooks

Related questions

Q: the change in stock if:- Closing stock = $3200 Opening stock = $1300

A: A stock or equity is a security that addresses the responsibility for part of an organization. This…

Q: Bond rating agencies like Moody's and Fitch specialize in: O A assessing the credit and default risk…

A: Introduction Bond rating agencies helps us to understand the risk of investment in bonds. Correct…

Q: Which of the following is the term used to identify income of a tax-exempt organization that may be…

A: The laws governing unrelated business income taxation have a common thread. Simply said, income…

Q: We have had similar reductions in stock prices to those in 1929 before and after the Great…

A: A depression is a period of severe and persistent economic contraction. In economics, a depression…

Q: 44) Everything else held constant, if the expected return on ABC stock rises from 5 to 10 percent…

A: At the marketplace, expected returns refers to the estimation of gain from making investment by…

Q: mic indicator.

A: Leading indicators are considered to be a heads-up for investors and economists who hope to in turn…

Q: Answer the attached question

A: An incorporated entity formed to limit liabilities of the owners/stockholders is a corporation.…

Q: Do stock prices and interest rates tend to move in opposite or the same direction? Explain the basis…

Q: . Milton Friedman's view that the sole responsibility of a corporate executive is to increase…

A: Milton Friedman's view that the sole responsibility of a corporate executive is to increase profits…

Q: Which of the following is a reason (s) that US investors should consider foreign markets when…

A: When an individual constructs a global portfolio, it tries to capture opportunities from different…

Q: Consider the table given below to answer the following question. Year 1 2 5 8. 9. 10 Asset value…

A: Introduction Present value in year 1 = cash flow(1 + return)n = 13.13(1 + 0.13)1 = 11.61 Present…

Q: III. Label each of the following statements true, false, or uncertain. Explain your choice…

A: please find the answer below.

Q: Question 1: Based upon the 4 hypothetical manager profiles in the table below, identify and discuss…

A: In the above question, we are given the data of 4 Managers along with their stock market indicators…

Q: 9. If you believe that stock prices follow a random walk, then probably you a. do not believe that…

A: In the mentioned question we have to tell if we believe in the stock prices then what do we believe…

Q: The price of a stock is largely influenced by supply and demand. When more people want to buy a…

A: The curve that depicts various quantities of goods and services being demanded by individuals is…

Q: Draw and label the bond market graph covered in chapter 5. Then, using the graph, Illustrate and…

A: When there is decrease in the profitability of business investments, the businesses will invest…

Q: 6. The law (or rule) that explains why stock returns tend to have a bell (normal) curve is ca a. The…

A: The normal distribution is a bell curve shaped, the central limit theorem states that the…

Q: Which of the following apply to stocks? Select all that apply. Earn gains from dividends Earn…

A: Answer: Stocks do not pay interest instead they pay dividends. Thus investors earn from dividends.…

Q: Using the information for Northern Resorts & Hotels presented in the table below, determine the…

A: Stock refers to a financial assets which is issued by the multi-national corporations or public…

Q: 38) An important financial institution that assists in the initial sale of securities in the primary…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following is TRUE for a coupon bond? 31 Select one: a. The yield is less than the…

A: A coupon Bond refers to the annual interest payment that the bondholder gets from the bond's issue…

Q: Last year CompanyXA paid a dividend of $2 per share. Use a growth rate of 2% per year and a discount…

A: Dividend paid = 2 $ Growth rate = 2 % Discount rate = 5 % Next dividend = 2 $ * (1 + 2%) = 2.04$

Q: Which of the following statements correctly identify who is the principal and who is the agent? O In…

A: Agent – the party who arranges for the products or services to be given by another party without…

Q: Which of the following statements is not consistent with an accurate explanation of how and why…

A: Stock costs are resolved in the commercial center, where merchant supply fulfills purchaser need. In…

Q: 49) If stock prices follow a random walk, it means that stock prices are just as likely to rise as…

A: The stock price is the current price that a share of stock is trading for on the market. The price…

Q: Visit the Bloomberg Markets website at www.bloomberg .com/markets/stocks. Their interactive graph…

A: Considering the given information, Dow Jones industrial average has been most volatile.

Q: A British pharmaceutical company spent several years and considerable funds on the development of a…

A: Answer in step 2

Q: The total value of a firm's stock which can be computed by multiplying the number of shares…

A: Market capitalization: - Market capitalization is the market value of all outstanding shares of a…

Q: spread, equity market volatility, and equity market risk premium. Post's beta in the U.S. equity…

Q: Explain the specific risk and market risk affecting a company or a group of companies that represent…

A: The following problem has been answered as follows:

Q: efficiency are INCORRECT? i) Strong-form efficiency implies that fundamental analysis (such as…

A: Strong form efficiency is considered to be the most stringent version which in turn states that all…

Q: In many situations, financial innovations are viewed as innovative variations on existing…

A: the term financial innovation means new ways or innovative financial methodologies. This innovative…

Q: 19. Suppose that you are a trader at the stock market. T-Mobile's stocks currently trade at $45 and…

A: In economics, the term "expectations" refers to the projections or perspectives that decision makers…

Q: Consider two firms (a) Firm A has profits twice as large as Firm B's profits. The firms do not…

A: a) since both are identical in nature so firm B stock is going to rise in the future i.e. upto 40…

Q: Why might a company’s stock price fall after record earnings are announced? Conversely, why might…

A: The current price at which the share of stock is sold and purchased in the market is called stock…

Q: . If the market value of a firm registers consistent increase, we can reasonably conclude that…

A: Market value: It refers to the price at which the economy will try to set the trade in a competitive…

Q: Last year Wei Guan Inc. had $350 million of sales, and it had $270 million of fixed assets that were…

A: Given the actual sales = $350 Capacity = 63%

Q: The following are correct statements about the composition of Financial Markets, EXCEPT: O Financial…

A: To identify the correct statement about the composition of financial markets.

Question

68- If a stock market is utilizing all of the available information on earnings projections, interest rates, risk, etc., economists refer to the market as A- proper B- attentive C- efficient D- Fully engaged

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

1. Suppose you buy a share of stock for $10 and sell it for $20; your profit is thus $10. If that happens within a year, your rate of return is an impressive 100%. If it takes five years, what would be the annual rate of return on your investment?
The total value of a firm's stock which can be computed by multiplying the number of shares outstanding by the market price per share is called what? a. Market capitalization b. Market return c. Market weighted d. Market beta
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.
Consider two firms (a) Firm A has profits twice as large as Firm B's profits. The firms do not differ in any other way. Which firm's stock should you buy if Firm A's stock price is PA = $50 and Firm B's stock price is PB = $30? What would you expect to happen to stock prices in equilibrium? Explain your answer (b) Suppose stock prices are in equilibrium. Explain what happens to the stock prices of these two firms if the interest rates increase? (c) Suppose stock prices are in equilibrium. Does the Efficient Market Hypothesis suggest to %3D buy one stock or the other stock? Explain.
12. Impact of Economic Growth. Explain how economic growth affects the valuation of a stock. ANS: The firm's value should reflect the present value of its future cash flows. Because earnings are a primary component of corporate cash flows, many investors use forecasted earnings to determine whether a firm's stock is over- or undervalued.
1) Suppose you buy one share of stock for $50 and sell it for $100. Your profit is $50. If that happens within a year, your rate of return is an impressive 100%! If it takes six years, what would be the average annual rate of return on your investment?
Why may different analysts arrive at different intrinsicvalues for the same stock?
2. A friend has started a business selling software. The software is a great hit, and the firm quickly grows large enough to sell stock. Your friend's firm promises to pay a dividend of $5 per share every year for the next 50 years, at which point your friend intends to shut down the business. The firm's stock is currently selling for $75 per share. If you believe that the company really will pay dividends as stated and if you require a 10% rate of return to make this investment, should you buy the stock? Briefly explain.
Regarding the previous page, consider you and your partner are planning to become a franchise of an international food chain (L’Osteria, Subway, ...) and think about the following problems: • What impact do you think current economic conditions have on your investment plan • Explain the nature and the current status of risks involved in your plan.
Explain briefly why stock prices are a leading economic indicator.
What is an economically meaningful corporate event from a shareholders’ ownership perspective? a. stock buyback b. stock split c. stock dividend
The price these buyers are willing to pay for the stock is called _____________.