For the following situations comment given your knowledge of efficient markets and asset pricing. If they...

 

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For the following situations comment given your knowledge of efficient markets and asset pricing. If they are wrong explain why they are wrong (a) (6 pts) "If all securities are fairly priced, all must offer equal expected rates of return" Comment. (b) (6 pts) At a house party, your classmate tells you that she has beaten the market for each of the last three years. Suppose you believe her. Does this shake your belief in efficient markets? (c) (6 pts) "Constantly fluctuating stock prices suggest that the market does not know how to price stocks" (d) (6 pts) "If stock prices follow a random walk, then capital markets are little different from a casino" (e) (6 pts) "If the business cycle is predictable, and a stock has a positive beta, the stock's returns also must be predict able" For the following situations comment given your knowledge of efficient markets and asset pricing. If they are wrong explain why they are wrong (a) (6 pts) "If all securities are fairly priced, all must offer equal expected rates of return" Comment. (b) (6 pts) At a house party, your classmate tells you that she has beaten the market for each of the last three years. Suppose you believe her. Does this shake your belief in efficient markets? (c) (6 pts) "Constantly fluctuating stock prices suggest that the market does not know how to price stocks" (d) (6 pts) "If stock prices follow a random walk, then capital markets are little different from a casino" (e) (6 pts) "If the business cycle is predictable, and a stock has a positive beta, the stock's returns also must be predict able"

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Efficient markets and asset pricing a If all securities are fairly priced all must offer equal expected rates of return This statement is false Even i... View the full answer