Exam 2 - Questions Flashcards
Learn beta
(Covariance of asset i and market )/ standard de vocation of market
Learn covariance, variance, expected return
-
There is diversification when beta is
Less than 1
Random prices movements indicate
That market are functioning efficiently
Choosing stocks by search for predictable patterns in stock prices is called
Technical analysis
The optimal risky portfolio can be identified by finding
- the tangency point of the capital market line and the efficient frontier
- The line with the steepest slope that connects the risk-free rate to the efficient frontier
Couple of emh questions
Like weak, semi, strong
If beta is 1 and the STD jumps from 12%-18% then the new beta is
1.5
Make sure u know alpha
-
Positive alpha is ______
Underpriced
[possible] indispensable are able to profitably trade and earn abornoaml return prior to the announcement of the positive news. This is a violation of which form of efficient
Strong form efficiency
Most evidence indicates that us stock markets are __
Reasonably weak form and semi strong efficient
[[possbile] according to the semi-strong form of the form market hypothesis
Future changes in stock prices cannot be predicted from any information that is publicly available
[possible the strong form of the EMH states that _____ must be reflected in the current stock price
All information ,including inside information
The semi-strong form of the EMH States that ___ must be re-elected in the current stock price
All publicly available information
