Quiz Ch 07 – Random-Walk Theory and Stock Price Increases
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
What are the chances of a stock’s price increasing after two consecutive days of gains in the random-walk theory?
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.
True or false: Investors will be willing to pay a higher price for a company’s stock today if they anticipate the company will have the chance to make highly profitable investments in the future.
True or false: Market efficiency suggests that investigating a firm’s stock price history yields above-average returns.
True or false: Market efficiency indicates that security prices swiftly absorb and reflect new information.