Question

Is the predictability of stock returns evidence for market efficiency? Discuss. If markets were informationally efficient,...

Is the predictability of stock returns evidence for market efficiency? Discuss.

If markets were informationally efficient, should we expect analysts to exist as a profession?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The Unpredictability of the stock prices is the evidence of the market efficiency that means anyone can not predict the price of the share in to the future because the price does not follow any past trend and any Investors does not have any private information that is not available in public such markets are called efficient Market. The another statement is that if the market are efficient there is no profession of analyst that is true because what the analyst do is to find the under valued stocks with past trend analysis and according to the efficient market theory the past will not be repeated that means the stock prices can not be predicted by the past data available that means there is no need of analyst who analyse the past data and find relavent conclusion.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Stock Market and Efficient Markets True/False 1. Expectations that are formed solely on the basis...
The Stock Market and Efficient Markets True/False 1. Expectations that are formed solely on the basis of past information are know as rational expectations. 2. The theory of rational expectations argues that optimal forecasts need not be perfectly accurate. 3. An important implication of rational expectation theory is that when there is a change in the way a variable behaves, the way expectations of this variable are formed will change as well. 4. If the optimal forecast of a return...
In the light of the empirical evidence on Efficient Markets Theory, critically evaluate the following statement,...
In the light of the empirical evidence on Efficient Markets Theory, critically evaluate the following statement, “stock market is micro efficient but macro inefficient”
If you were a stock trader and markets were not efficient, how would this influence your...
If you were a stock trader and markets were not efficient, how would this influence your trading activity? What does this tell you about why markets may be efficient?
1.is the stock market absolutely efficient? 2.if market is efficient, January Effect should not exist. Do...
1.is the stock market absolutely efficient? 2.if market is efficient, January Effect should not exist. Do you agree?
Q1: Representativeness, according to financial economists, leads to: strong form efficient financial markets. stable stock returns...
Q1: Representativeness, according to financial economists, leads to: strong form efficient financial markets. stable stock returns over both short and long periods of time. stock price under reactions to new information. abnormal long-term profits. overreactions in stock returns. Q2: The efficient market hypothesis says that, on average, professional investors will: tend to earn below average rates of returns. outperform investors with inside information. earn a normal rate of return. earn the same rate of return over time regardless of the...
Explain stock market efficiency. If the market is efficient, would you invest in each of the...
Explain stock market efficiency. If the market is efficient, would you invest in each of the following? Explain. (i) fundamental funds (ii) market-cap-weighted funds (iii) and robo portfolios.
In an efficient market, anomalies may result from (a) high stock returns (b) low market returns...
In an efficient market, anomalies may result from (a) high stock returns (b) low market returns (c) inappropriate risk adjustment (d) market disequilibrium (e) none of the above
Discuss why the efficient market hypothesis does not hold in financial markets which are inherently unstable.
Discuss why the efficient market hypothesis does not hold in financial markets which are inherently unstable.
What type of market efficiency a technical stock trader believes in - weak, semi-strong, or strong...
What type of market efficiency a technical stock trader believes in - weak, semi-strong, or strong form efficient markets?
Assume that markets are weak-form efficient, but not semi-strong form or strong form efficient. Which of...
Assume that markets are weak-form efficient, but not semi-strong form or strong form efficient. Which of the following statements is most correct? a. Each common stock has an expected return equal to that of the overall market. b. Bonds and stocks have the same expected return. c. Investors can expect to earn super-normal returns if they have access to public information. d. Investors may be able to earn super-normal returns if they have access to information that has not been...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT