Exam 9: Behavioral Finance and Technical Analysis

Matthews Corporation has a beta of 1.2.The annualized market return yesterday was 13%,and the risk-free rate is currently 5%.You observe that Matthews had an annualized return yesterday of 17%.Assuming that markets are efficient,this suggests that

With regard to market efficiency,what is meant by the term "anomaly"? Give three examples of market anomalies and explain why each is considered to be an anomaly.

Google has a beta of 1.0.The annualized market return yesterday was 11%,and the risk-free rate is currently 5%.You observe that Google had an annualized return yesterday of 14%.Assuming that markets are efficient,this suggests that

Proponents of the EMH think technical analysts

Proponents of the EMH typically advocate

According to proponents of the efficient market hypothesis,the best strategy for a small investor with a portfolio worth $25,000 is probably to

___________ the return on a stock beyond what would be predicted from market movements alone.

Malkiel (1995)calculated that the average alphas,or abnormal returns,on a large sample of mutual funds between 1972 and 1991 were

If stock prices follow a random walk

Chartists practice

To improve the likelihood of choosing "winning" mutual fund managers,investors should look for

Fama and Blume (1966)showed that investors could _________ by exploiting filter rules.

Work by Amihud and Mendelson (1986,1991)

A market decline of 23% on a day when there is no significant macroeconomic event ______ consistent with the EMH because ________.

Which of the following are used by fundamental analysts to determine proper stock prices? I.trendlines II.earnings III.dividend prospects IV.expectations of future interest rates V.resistance levels

The debate over whether markets are efficient will probably never be resolved because of ________