A situation in which the price of an asset differs

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28) A situation in which the price of an asset differs from its fundamental market value is called A) an unexploited profit opportunity. B) a bubble. C) a correction. D) a mean reversion. Answer: B 29) A situation in which the price of an asset differs from its fundamental market value 30) Studies of mutual fund performance indicate that mutual funds that outperformed the market in one time period 31) The efficient market hypothesis suggests that allocating your funds in the financial markets on the advice of a financial analyst 136
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32) Ivan Boesky, the most successful of the so-called arbs in the 1980s, was able to outperform the market on a consistent basis, indicating that A) securities markets are not efficient. B) unexploited profit opportunities were abundant. C) investors can outperform the market with inside information. D) only (B) and (C) of the above. Answer: D 33) To say that stock prices follow a "random walk" is to argue that 34) To say that stock prices follow a "random walk" is to argue that 35) Rules used to predict movements in stock prices based on past patterns are, according to the efficient markets theory,
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