If the stock market behaves according to the efficient market hypothesis, then
a. investment in stocks cannot be profitable.
b. future changes in stock movements are completely predictable.
c. current stock prices reflect all currently available information.
d. both b and c.
e. all of the above.
C
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A risk-averse person
a. has a utility curve where the slope increases with wealth, and might take a bet with a 80 percent chance of winning $300 and a 20 per chance of losing $300. b. has a utility curve where the slope increases with wealth, and would never take a bet with a 80 percent chance of winning $300 and a 20 per cent chance of losing $300. c. has a utility curve where the slope decreases with wealth, and might take a bet with a 80 percent chance of winning $300 and a 20 per chance of losing $300. d. has a utility curve where the slope decreases with wealth, and would never take a bet with a 80 percent chance of winning $300 and a 20 per cent chance of losing $300.
The federal funds rate is the interest rate for
A. reserves that banks borrow from the Fed. B. the preferred customers of the banks. C. reserves borrowed by one bank from another bank. D. banks belonging to the Federal Reserve System.
The opportunity cost of holding money is measured by:
A) short-term nominal interest rate B) short-term real interest rate C) long-term nominal interest rate D) long-term real interest rate
Experimental effects, such as the Hawthorne effect,
A) generally are not germane in quasi-experiments. B) typically require instrumental variable estimation in quasi-experiments. C) can be dealt with using binary variables in quasi-experiments. D) are the most important threat to internal validity in quasi-experiments.