Describe the three forms of market efficiency
What will be an ideal response?
Answer: WEAK-FORM MARKET EFFICIENCY: In weak-form efficient markets, current prices reflect the price history and trading volume of the stock. It is of no use to chart historical stock prices to predict future stock prices such that you can identify mispriced stocks and routinely outperform the market.
SEMI-STRONG-FORM MARKET EFFICIENCY: In semi-strong-form efficient markets, current prices already reflect the price history and volume of the stock, as well as all available public information. It is therefore of no use to try to exploit publicly available news or financial statement information to routinely outperform the market.
STRONG-FORM MARKET EFFICIENCY: In strong-form efficient markets, current prices reflect the price and volume history of the stock, all publicly available information, and all private information. All information is already embedded in the price, and there is no advantage even to insiders who might wish to exploit their private information.
You might also like to view...
Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years wasdepreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the remaining useful lifeshould be shortened by 3 years and the residual value changed to zero. The depreciation expense for the currentand future years is
a. $16,000 b. $11,636 c. $11,000 d. $8,000
Parsimony is important in industrial marketing because it is inefficient to pursue too many segments
Indicate whether the statement is true or false
What term below is not an example of intrinsic motivation?
A. social reinforcement B. feeling of accomplishment C. sense of purpose D. self-praise
The cost flow method chosen must match the actual physical flow of the goods.
Answer the following statement true (T) or false (F)