Efficient market hypothesis and systematic risk
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The historical returns on large-company stocks, as reported by Ibbotson and Sinquefield, are based on:
the largest 20 percent of the stocks traded on the NYSE.
the stocks of the largest 10 percent of the publicly traded firms in the U.S.
all of the stocks listed on the NYSE.
the stocks of the 500 companies included in the S&P 500 index.
Which of the following is true regarding the efficient market hypothesis?
It argues that efficient markets are not volatile throughout a trading day.
It suggests that an efficient market can only consider historical information when determining current security prices.
It proves that market inefficiencies do not exist in either the short-run or the long-run.
It implies that all investments in an efficient market have a net present value of zero.
Which of the following statements is true regarding systematic risk? Select all that apply:
is diversifiable
is the total risk associated with surprise events
it is not project or firm specific
is measured by beta
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The historical returns on large-company stocks, as reported by Ibbotson and Sinquefield, are based on:
Answer: the stocks of ...
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