Why does the theory of efficient markets imply that stock price movements are unpredictable?
What will be an ideal response?
If people could accurately forecast price movements in stocks, they would immediately act on those forecasts, which would cause the price of the stocks to move today. When markets are efficient, the price at which a stock currently trades reflects all available information, so the future price movements are unpredictable.
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Which of the following is not an example of a market?
A. An auction B. Grocery store C. Donation center D. EBay
On January 1, Rick's Photo owned $50,000 of equipment. During the year, the value of the equipment fell by $10,000, plus Rick bought $25,000 in new equipment. Rick's company experienced
A) an increase of net investment of $35,000. B) $40,000 of depreciation. C) $10,000 of depreciation. D) a change in total financial capital of $15,000. E) an increase of new capital by $10,000.
The equilibrium wage rate in an industry is found by
A) the intersection of the market demand curve for labor and the marginal revenue product curve of labor. B) the intersection of the firm's demand curve for labor and the firm's supply curve of labor. C) the intersection of the market demand curve for labor and the market supply curve of labor. D) negotiations between the union leadership and the managers of the firms.
The U.S. income tax is based on the principle of
a. cost of service. b. benefit received. c. ability to pay. d. equality of sacrifice.