If the optimal forecast of the return on a security exceeds the equilibrium return, then
A) the market is inefficient.
B) no unexploited profit opportunities exist.
C) the market is in equilibrium.
D) the market is myopic.
A
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One way in which the Phillips curve is misinterpreted is to think of it as
A. a model of economic activity that explains changes in unemployment and inflation by changes in aggregate demand. B. a statistical relationship between inflation and unemployment. C. depicting a number of alternative equilibrium points the economy could achieve. D. All of these responses are correct.
Which of the following is an example of FGLS estimation?
A. Dickey-Fuller estimation B. Vector error correction estimation C. Prais-Winsten estimation D. OLS estimation.
The law of demand implies that:
A) consumers are not responsive to price changes. B) consumers will, all other things unchanged, buy more at lower prices. C) sellers will, all other things unchanged, offer more on the market at higher prices. D) sellers will, all other things unchanged, offer less on the market at lower prices.
Innovation typically increases when
A. government controls the resource base. B. the legal system is weak. C. high taxes are present. D. market incentives and private property rights are encouraged.