Exam 10: Concepts and Applications of Market Efficiency

Haugen and Lakonishok (1988)seek to replicate the trading strategy in the USA by:

In Australia,which day of the week has equity returns that are on average 'low?

The presence of autocorrelation in stock returns is consistent with market efficiency.

Event study tests generally focus on the price reaction to

Joe bought a stock at $57 per share.The price promptly fell to $55.Joe held on to the stock until it again reached $57,and then he sold it once he had eliminated his loss.If other investors do the same to establish a trading pattern,this would contradict _______.

An unbiased reaction is one where there is ___ to the arrival of new information.

Positive autocorrelation implies that negative price changes are followed by positive price changes.

One misconception about market efficiency is that:

The large positive returns observed for firms in the Australian market in July and January are primarily caused by market overreaction.

Short-term profits are expected to be greatest by forming a position on/in _________ and closing it in ____________.

By using the Consumer Price Index (CPI)as an economic indicator,it can be argued that it has a:

The presence of negative correlation over long horizons is consistent with:

The more profitable IPO investments seem to be those:

Which of the following is a misconception of market efficiency?

It is impossible for markets to incorporate all information into prices.

The Australian study by Easton in 1990 found an insignificant jump in stock returns around extraordinary item announcements.

Transaction costs of taking a short position exceed those of a long position by:

Which of the following strategies will be profitable if the market overreacts?

The group of investors who trade because of a surplus or need for cash are called:

Loyalists believe that the long-term patterns in returns are induced by: