Quiz Ch 07 – Market Efficiency and Reflecting Fair Value
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
In which type of market efficiency would stock prices always accurately represent fair value?
In which type of market efficiency would stock prices always accurately represent fair value?
What does the evidence typically indicate regarding the arrival of new information in the market?
What does the evidence that newly issued stocks typically perform poorly compared to the market in the subsequent years suggest?
What are the chances of a stock’s price increasing after two consecutive days of gains in the random-walk theory?
What does the semi-strong form of the efficient market hypothesis assert?
What does the sustainable growth rate represent for a company in terms of its growth potential?
True or false: A significant proportion of active managers consistently outperform a basic strategy of investing in the entire large-cap market.
True or false: The present stock price, as per the dividend discount model, is calculated as the total of the present values of all expected future dividends.
True or false: In the dividend discount model, a stock’s value is the sum of the present values of the dividends it will dispense during the investor’s horizon and the anticipated stock price at the horizon’s conclusion.
True or false: Growth stocks have, on average, outperformed value stocks throughout history since 1926.