HW5-ANSW (1).pdf - FIN319 Spring 2017 Homework 5 Chapters 6&7(Due Date Apr 7 Midnight at [email protected] Use the Excel file that I provided in the

HW5-ANSW (1).pdf - FIN319 Spring 2017 Homework 5 Chapters...

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FIN319: Spring 2017 Homework 5: Chapters 6&7 (Due Date: Apr. 7 Midnight at [email protected] ) Use the Excel file that I provided in the Blackboard. Filename & Email Subject: HW5-Your full name 1.According to the efficient markets hypothesis, the best strategy for betting on an athletic tournament, such as the NCAA basketball tournaments, is to A)randomly pick the winners in each round. B)watch as many games as possible on television so you are as well informed as the “experts.” C)select the teams by your favorite mascots. D)select the highest seeded team to win each round. E)always select the underdog to win. 2.According to the efficient market hypothesis, the current price of a financial security 3.The efficient market hypothesis 4.If the optimal forecast of the return on a security exceeds the required return, then 5.Another way to state the efficient market hypothesis is that in an efficient market, A)unexploited profit opportunities will never exist as market participants, such as arbitrageurs, ensure that they are instantaneously dissipated. B)unexploited profit opportunities will not exist for long, as market participants will act quickly to eliminate them. C)every financial market participant must be well informed about securities. D)only A and C of the above. 6.A situation in which the price of an asset differs from its fundamental market value is called
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