The efficient market theory would be violated if investors earned extraordinary returns months after a company announced unexpected profits. Thus, the correct option is (d.) Investors earn abnormal returns months after a firm announces surprise earnings.
<h3>What exactly is the hypothesis of an efficient market?</h3>
The efficient-market hypothesis is a financial economics concept that asserts asset prices represent all available information. Because market prices should only react to fresh information, it is impossible to continually "beat the market" on a risk-adjusted basis.
Because the EMH is expressed in terms of risk adjustment, it can only offer testable predictions when combined with a specific risk model. As a result, financial economics research has focused on market anomalies, or departures from specified risk models, since at least the 1990s.
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Adam was unable to finish high school because he needed to go to work to help his family financially. This forms a Non-formative type of influence
This is further explained below.
<h3>What is a Non-formative type of influence?</h3>
Generally, The term "nonnormative effects" refers to those that do not affect each member of a set in the same manner. Nonnormative suggests it does not affect everyone in the same way in the culture, while normative suggests it does (or not at all).
In conclusion, Adam dropped out of school before he could graduate from high school because he had to start earning money to support his family. This is an example of a non-formative impact.
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Answer:
C. A risk averse investor would choose the economy in which stock returns are independent because risk can be diversified away in a large portfolio.
Explanation:
if stock prices move together, (positive correlation), the volatility of the portfolio will be higher. Higher volatility means higher risk. This is the case with the first economy.
In the second economy however, the stocks are independent of each other meaning there is zero correlation between stocks and hence the portfolio volatility will be much lesser.
As a risk-averse investor you will prefer the portfolio with lower volatility for the same expected return.
An image that does not match the text in any manner.
"Irrelevant" means not related or connected to something. The other examples may not be the best use of media but they are not necessarily irrelevant.
Answer:
Use of streaming services.
Explanation:
In the present era, the streaming services have taken over the cable services. Streaming services include popular names like Netflix, Amazon Prime Video, Hulu and many more. These services provide online series and movies to the viewers on their mobile phones or computer system. As these services provide more flexibility to the end-user, therefore, they are more in the recent online video viewing trends.