Stock prices depend on how the economy is doing. Macroeconomic variables reflecting the state of the economy
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Question:
Stock prices depend on how the economy is doing. Macroeconomic variables reflecting the state of the economy are highly statistically predictable. Thus, stock prices (returns) should be predictable too, but they are NOT. How can you explain this apparent puzzle with the efficient markets hypothesis?
Related Book For
Business Statistics
ISBN: 9780321925831
3rd Edition
Authors: Norean Sharpe, Richard Veaux, Paul Velleman
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