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“Investors can only get normal profit”. Give detailed explanation on this statement and apply the market efficiency theory in your answer
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- If you believe market prices can be predicted by solely studying past prices, then you believe the market is ____ form efficient.The objective function of an investor in a CAPM world is to what (mathematically) [what are your trying to maximize]? What is the major assumption about the distribution of returns that we have to make to get to this objective function?Which of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.
- “Investors cannot beat the market”. Elaborate on this statement and apply the efficiency continuum in your explaination.In the strong form of the market accoarding to the Efficient Market Hypothesis investor can earn excess returns by usin the available information. Select one: a. False b. TrueIf all investors believe that the market is efficient, could that eventually lead to less efficiency in the market? Explain with an example.
- Just answer market performance (d) thanksSelect all that are true with respect to the theory of market efficiency. Group of answer choices If markets are efficient, investors cannot earn positive returns If markets are efficient, it means prices are always "right" in that the reflect perfect foresight into what will happen in the future Strong form market efficiency suggests that all information, public or private, is reflected in current prices in an unbiased way Market efficiency suggests that relevant information is quickly impounded into prices If transaction costs are high, then prices are less likely to reflect all available informationExplain what is the “behavioral view” of market efficiency? Cite some sources
- The underlying assumptions of technical analysis are that A.price move in predictable patterns B. Market value is determined by market news C. Investors are rationalCarefully explain the Arbitrage Pricing Theory (APT). What is the main assumption the APT is built on? (b) With regard to market efficiency, what is meant by the term "anomaly"? Give two examples of market anomalies and explain why each is considered as an anomaly.Distinguish between different levels of financial market efficiency. Give examples to illustrate your answer. please provide havard referencing