BUSI 408 March 14 Chapter 8 - BUSI408March14Chapter8

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
BUSI 408 March 14 Chapter 8 15:26 R(actual)=R(expected)+noise Lesson 1: The riskier investments have historically realized higher returns Lesson 2: The historical returns of the higher risk investment classes have higher  standard deviation.  Small stocks>Treasury bills(riskiness) Gold has lowest return Volatility—measured by standard deviation Global Financial Market: U.S. stocks has relatively small volatility Developed markets< Emerging markets(volatility) What determines stock prices? Stock prices tend to go up when there is good news about future profits, and they  go down when there is bad news about future profits. Efficient market: investments cannot be predicted.  Weak-Form Efficient Market Hypothesis: all past security market information is  fully reflected in security prices. All price and volume information is already  reflected in a security’s price.  Semi-Strong-Form Efficient Market Hypothesis
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/10/2011 for the course BUSI 408 taught by Professor Zeighamkhokher during the Spring '11 term at University of North Carolina School of the Arts.

Page1 / 4

BUSI 408 March 14 Chapter 8 - BUSI408March14Chapter8

This preview shows document pages 1 - 2. Sign up to view the full document.

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