What are some of the more important disagreements between the efficient market hypothesis and the findings of behavioral finance?
What will be an ideal response?
Answer: For a market to be efficient, investors must react in a rational manner and respond promptly to market events. If investors base their decisions on misperceptions caused by overconfidence or emotional factors such as loss aversion, rather than objective information, they may either overreact or under react, and markets will not be as efficient as the EMH makes them out to be.
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Cybersquatting describes the practice of
A. registering multiple domain names and then selling them back to companies at inflated prices. B. hacking into a company's website to install a virus designed to cause the company's website to totally cease operation. C. hacking into a company's website to install a virus or Trojan horse designed to steal information but allow the site to continue operation. D. using mechanical devices to access a company's website multiple times to the point that traffic to the site is slowed or blocked.
The "Soup is Good Food" tag line used by Campbell's Soup is an example of hyperbole in advertising
Indicate whether the statement is true or false
Averages of small samples, not individual measurements, are generally used in statistical process control
Indicate whether the statement is true or false
Which of these items will not generally be affected by an increase in the debt ratio?
A. Total risk. B. Financial risk. C. Market risk. D. The firm's beta. E. Business risk.