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TRUE or FALSE 1) One of the key conclusions of capital asset Pricing Model is that...

TRUE or FALSE

1) One of the key conclusions of capital asset Pricing Model is that it is impossible to perform better than the market in a persistent way?

2)The weak form of the market efficiency hypothesis states that securities prices incorporate all available public information about them?

3)The seller of a put option has an interest in the price of the underlying security falling?

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Answer #1

1) False - The efficient market hypothesis (EMH), alternatively known as the efficient market theory, is a hypothesis that states that share prices reflect all information and consistent alpha generation is impossible.

2) False - semi stron form of market efficieny hypothersis believe that securities prices incorporate all available public information about them. The weak form suggests that today’s stock prices reflect all the data of past prices and that no form of technical analysis can be effectively utilized to aid investors in making trading decisions.

3) False - If security price decreases, the buyer of put option will exercise the option and benefits from the option, which is not beneficial for seller of put option.

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