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Fudgin [204]
4 years ago
12

What is the efficient markets hypothesis, and how does it relate to random walks?

Business
1 answer:
ioda4 years ago
8 0

Answer: Answer is in Explanation below

Explanation: The efficient market hypothesis expresses that assets such as share prices are set to reflect all the information available. This means that the prices found in the markets only respond to new information.

A random walk states that share market prices change randomly. This means that the prices cannot be forecasted. This financial theory makes it consistent with the efficient market hypothesis, as these prices are set based on available information, and only change when new info is introduced into the market. Investors do not have a say in what the price should be, and cannot claim that the share price is over or undervalued.

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If interest rates increase from 9 percent to 10 percent, a bank with a duration gap of 2 years would experience a decrease in it
Rasek [7]

The duration gap is calculated by subtracting the duration of the liabilities from the duration of the activity of the financial entities. Thus, in this case, the net worth of  1.8 percent of its assets.

<h3>What do you mean by Duration Gap?</h3>

Duration Gap refers to the term used by funds, banks, pensions, or many financial institutions to estimate the risk because of changed interest rates.

Also, if we have a negative duration gap means that the market value of equity will increase when interest rates rise.

Thus, in this case, If interest rates increase from 9 percent to 10 percent, a bank with a duration gap of 2 years would experience a decrease in its net worth of 1.8 percent of its assets.

Learn more about Duration gap here:

brainly.com/question/7276068

#SPJ1

8 0
3 years ago
Which are options for filtering specific categories in a record? Check all that apply.
baherus [9]

Answer:

placing cursor on desired data and clicking "Filter by selection"

right-clicking and choosing "Sort A to Z"

Explanation:

The data can be filtered according to user requirements. There are several options to sort and filter data. The user can filter data according to different groups. He can sort the data according to ascending and descending.

8 0
3 years ago
Chief financial officer Justin took his family on an Asian vacation using the company jet. He excuses his behavior by stating, "
umka2103 [35]

Answer:

rationalizing            

Explanation:

Rationalization in psychology or logic is indeed a defensive mechanism wherein problematic actions or emotions are defended and clarified in an obviously logical or rational way to escape the mechanistic explanation, and are rendered actively bearable or perhaps even impressive and preferable by convincing methods.

Rationalization facilitates unreasonable or unacceptable behavior motivations or emotions and sometimes includes hypothesizing ad haste. This cycle goes from completely aware to mostly unaware. Individuals rationalize for different reasons. 

7 0
4 years ago
The Perfect Haircut: Consumers' Search Process
konstantin123 [22]

Answer:

Explanation:

✓Performance Risk

1)Could Damage Career

2)All the same

✓Financial Risk ( risks that could be attributed to finance, i.e money)

1)Tight budget

2)Expensive Service

✓Psychological Risk

1)Unimportant

2)Personal Image

✓Internal vs External ( ways to get access to information)

1)Salon of Convenience

2)Salon of Choice

✓Benefits vs Costs

1)Worth the Money

2)Effortless

5 0
3 years ago
Lori's Company has the following​ items: cash in a checking​ account, $ 9 comma 000$9,000​; cash in a savings​ account, $ 7 comm
Brut [27]

Answer:

$15,576 should appear as Cash and Cash Equivalents on the balance​ sheet

Explanation:

Cash and Cash Equivalents

= Cash in a checking account + Cash in saving account + High-grade government securities

= $5,000 + $7,000 + $3,576

= $15,576

Therefore, $15,576 should appear as Cash and Cash Equivalents on the balance​ sheet

6 0
4 years ago
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