Got a tricky question? Receive an answer from students like you! Try us!

Exam Paper - Essay Example

Only on StudentShare
Author : nadams

Summary

Date Answer 1 There are three forms of stock market efficiencies which include: - weak, semi-strong and strong forms of efficiencies. Weak form efficiency is one of the three degrees of efficient market hypothesis (EMH) that claims all the past prices of stock as they are reflected in today’s stock prices…

Extract of sample
Exam Paper

semi-strong form of efficiency is a class of EMH which claims that all public information is calculated into a stock’s current price hence there is no way either fundamental or technical analysis is applicable to achieve superior gains. It claims only non-publicly available information can be used by investors to earn abnormal returns on their investments as all the other remaining information is accounted for in the prices of the stocks and no fundamental or technical analysis will result into above normal returns. Strong form efficiency is the strongest as the name suggests as it states all the information in a stock market irrespective of whether public or private. All such information is accounted for in the stock price and not even insider information could give an investor advantage hence profits exceeding normal returns cannot be made regardless of the amount of research or information available to the investors. If a company trades its shares in a stock market with a semi-strong efficient market, the investors are likely to use the privately available information to make abnormal returns on their investment. Answer 2 The increase of the interest rates by the central bank results into loans from commercial banks being expensive as they also raise their interest rates to cover for the rise by the central bank. ...
Download paper

Tags

Paper

Related Essays

QUANTITATIVE RESEARCH METHODS-SEEN EXAM
2. By using or combining several time series of cross section observations, panel data provide “more informative data, more variability, less collinearity among variables, more degrees of freedom and efficiency” as per Baltagi’s discussion (1995, p. 3-6). 3. Panel data are able to study better the dynamics of change because the panel data technique is able to cover repeated cross section of observation across time. Thus, panel data is believed to more appropriate than either of the two methods (cross section and time series analysis) in the study of situations like successive waves of…
14 pages (3514 words)
exam questions
Since collective bargaining is a process directly associated with the trade unions, it can be rightly concluded that a fall in trade union membership would reduce the collective number of workers the unions represents, and therefore would lead to a decline in the collective bargaining practice itself. Union membership in the UK was in a consistent decline period from 1979 to 1998, and this can be attributed to a certain set of factors, both direct and underlying reasons. The direct causes of the dramatic decline of union membership are as below (Millward et al., 2000): Unions failed to gain a…
13 pages (3263 words)
exam questions
When agreement has been reached on specific terms and conditions which both the parties agree to, then the contract is signed and kept safe for a certain period of time, usually it is for three years. This contract is referred to as the collective bargaining agreement owing to the nature of the contract (Smith, 2011). The collective bargaining processes and practices in the United Kingdom have faced a gradual decline in contemporary times which is evident from the decline in the participation in trade unions, and there are certain underlying reasons which explain this downfall of the…
13 pages (3263 words)
Multijurisdictional tax final exam (emergency - has limited time!)
Treaty with Country X PERMANENT ESTABLISHMENT 1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2. The term "permanent establishment" includes especially: a) a place of management; b) a branch; c) an office; d) a factory; e) a workshop; and f) a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources. 3. A building site or construction or installation project, or an installation or drilling rig or ship used for the exploration of…
9 pages (2259 words)
First Exam
25). The first year of operation, the expansion of the company may be limited because of the evaluation of the cash flows to ascertain profitability of capital purchases. Leasing on a 36 month plan for 2013 ODYSSEY LX Leasing has several advantages that could lead to it being an advantage for the company. According to Parker, leasing has six main advantages that make it possible for businesses to use it as a method of acquisition of services (Parker, 2005, p. 48). Leasing offers chance of 100 percent financing which means that most leases come with a financing plan that makes it possible. The…
6 pages (1506 words)
Exam Questions
This results in a reduction per unit output and an increase in their average rate of operation. Such mergers can be extremely beneficial to companies who can benefit from the future advantage of multiple manufacturers are supported by a singular center. This can prove to be quite cost effective in the long term. 2. What are the advantages and disadvantages of the friendly versus hostile approaches to a corporate takeover? Hostile takeovers are sometimes preferred because it allows the takeover firm to, essentially, ambush the target company, giving them no time to react, preempt, or interfere…
3 pages (753 words)
Financial Reporting and Accountability exam questions
6 Consolidations: Qualitative 7 Why do regulators require consolidations? 7 What is fair value and why is it an important concept in consolidation? 7 Why do regulators require inter-company profits to be removed from consolidations? 7 Corporate Governance 8 What is ‘the public interest’ and what is its relationship to accounting? 8 Do we need mandatory regulation of reporting? If so how should we regulate? Are there major problems? 8 IASB and due process – what are the stages of due process – why is convergence with the US important? 9 What is the ‘market for corporate takeovers’…
7 pages (1757 words)