2009-Quiz 2 - Fin 3144 Investments Quiz 2 Name KEY 1 Before...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Fin 3144: Investments Quiz 2 Name: KEY 1. Before the market opened on March 10, 2009, Citi’s CEO, Vikram Pandit, announced that Citi earned a profit of about $8 billion in the first two months of 2009. The stock (C) jumped from $1.05 on March 9, 2009 to $1.45 at the close on March 10, 2009. Obviously, one of the two prices - $1.05 on March 9 th or $1.45 on March 10 th – was incorrect and not a true reflection of Citi’s value. Can both prices be reconciled with the notion of efficient markets? Explain. (10 points). 2. Identifying market inefficiencies is a profitable pastime among many market experts. However, some of the so-called inefficiencies suffer from severe biases. If those biases are removed, then those inefficiencies may cease to exist. Explain two types of biases, with examples, that may cause some of the apparent inefficiencies to disappear. (14 points).
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Key 1. Yes, one of the two prices was incorrect, possibly both were incorrect. However, note that
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 4

2009-Quiz 2 - Fin 3144 Investments Quiz 2 Name KEY 1 Before...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online