Question 1. (27 marks) You have been following the prices of SMU Dawg and recording the...

 

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Question 1. (27 marks) You have been following the prices of SMU Dawg and recording the following information: Date Open High Low Close 62.50 61.35 62.50 62.90 64.35 61.32 63.37 64.69 61.33 61.61 64.40 60.78 61.41 62.80 60.54 61.55 62.88 60.83 61.00 01-Jul-21 01-Jun-21 01-May-21 01-Apr-21 01-Mar-21 01-Feb-21 01-Jan-21 01-Dec-20 01-Nov-20 01-Oct-20 01-Sep-20 01-Aug-20 01-Jul-20 60.35 60.28 58.12 57.36 60.11 58.98 58.76 58.15 61.75 61.90 62.71 63.38 61.37 61.06 61.39. 60.54 60.33 60.72 62.31 59.47 60.54 Adj Close* 61.75 61.28 62.09 62.75 60.15 59.85 60.17 Dividend 58.25 58.05 58.42 59.41 56.17 57.18 0.625 0.625 1.130 65.24 62.84 60.91 61.73 62.52 63.00 59.51 63.41 60.09 62.44 59.06 61.44 *Remember to show all of your work* e. Based upon your calculations, what do you think the expected price will be on August 1 and what assumptions did you make to arrive at this expected price? (4 marks) f. What form of market efficiency did you use to calculate the expected price? Explain. (2 marks) g. You were listening to the news at supper time and you heard a report of a pending new product that SMU Dawg will introduce to the market next week that will change the company's product offering. Will this information have a potential of changing your estimate that you provided in part e? Explain. (3 marks) h. What form of market efficiency did you incorporate in part g? Explain. (2 marks) i. If the market is strong form efficient, would your expected price estimate change? Explain (2 marks) Volume 27,454,900 35,919,800 31,563,300 28,179,500 43,585,500 34,410,600 30,801,200 35,638,500 58,022,600 21,743,700 0.565 0.565 30,764,200 30,263,900 43,506,900 Question 1. (27 marks) You have been following the prices of SMU Dawg and recording the following information: Date Open High Low Close 62.50 61.35 62.50 62.90 64.35 61.32 63.37 64.69 61.33 61.61 64.40 60.78 61.41 62.80 60.54 61.55 62.88 60.83 61.00 01-Jul-21 01-Jun-21 01-May-21 01-Apr-21 01-Mar-21 01-Feb-21 01-Jan-21 01-Dec-20 01-Nov-20 01-Oct-20 01-Sep-20 01-Aug-20 01-Jul-20 60.35 60.28 58.12 57.36 60.11 58.98 58.76 58.15 61.75 61.90 62.71 63.38 61.37 61.06 61.39. 60.54 60.33 60.72 62.31 59.47 60.54 Adj Close* 61.75 61.28 62.09 62.75 60.15 59.85 60.17 Dividend 58.25 58.05 58.42 59.41 56.17 57.18 0.625 0.625 1.130 65.24 62.84 60.91 61.73 62.52 63.00 59.51 63.41 60.09 62.44 59.06 61.44 *Remember to show all of your work* e. Based upon your calculations, what do you think the expected price will be on August 1 and what assumptions did you make to arrive at this expected price? (4 marks) f. What form of market efficiency did you use to calculate the expected price? Explain. (2 marks) g. You were listening to the news at supper time and you heard a report of a pending new product that SMU Dawg will introduce to the market next week that will change the company's product offering. Will this information have a potential of changing your estimate that you provided in part e? Explain. (3 marks) h. What form of market efficiency did you incorporate in part g? Explain. (2 marks) i. If the market is strong form efficient, would your expected price estimate change? Explain (2 marks) Volume 27,454,900 35,919,800 31,563,300 28,179,500 43,585,500 34,410,600 30,801,200 35,638,500 58,022,600 21,743,700 0.565 0.565 30,764,200 30,263,900 43,506,900

Answer rating: 100% (QA)

ANSWER Calculation is as follows 1 2 3 42887 4 42856 5 42826 6 42795 7 42767 8 42736 9 42705 10 4267... View the full answer