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Unformatted text preview: of Toronto Stock Exchange stocks to pick a portfolio? No. All it says is that, on average, a portfolio manager will not be able to achieve excess returns on a risk-adjusted basis. What does it mean to say the price you pay for a stock is fair? It means that the stock has been priced taking into account all publicly available information. 14.4 What conclusions about market efficiency can be drawn from available evidence? Evidence supports the weak form and semi strong form, but not the strong form, efficient market hypothesis. 14.5 What are three implications of the efficient-market hypothesis for corporate finance? 1. The prices of stocks and bonds cannot be affected by the company's choice of accounting method. 2. Financial managers cannot time issues of stocks and bonds. 3. A firm can sell as many stocks and bonds as it wants without depressing prices....
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- Fall '08