Answer:
6.73%
Explanation:
the price of the bond in seven years is:
PV = $1,000 / (1 + 5.50%)¹⁰ = $585.43
PV of coupon payments = $64.50 x 7.538 (PVIFA, 5.5%, 10 years) = $486.20
market price = $1,071.63
using an excel spreadsheet of financial calculator, the annual rate of return:
year 0 = -1030.04
year 1 = 64.5
year 2 = 64.5
year 3 = 64.5
year 4 = 64.5
year 5 = 64.5
year 6 = 64.5
year 7 = 1136.13
IRR = 6.73%
Answer:
D. Prices fully reflect all available information
Explanation:
As per the efficient market hypothesis, security prices reflect full available market information due to which stocks trade at their fair market value prices.
Due to stocks trading at their fair market value, any possibility of making arbitrage gains is wiped out as buying low and selling high isn't a possibility.
The theory also states that the only way to earn higher profits is by assuming a higher degree of risk.
The theory states that stock prices follow a random walk and there is no perfect method to estimate the patterns and trends of the market irrespective of fundamental or technical analysis carried out.
The efficient market theory mentioned 3 conditions or market forms, strong form, semi strong form and weak form.
Answer: Tertiary
Explanation:
This is a research on an already concluded research hypothesis, either using the opinion as a raw data for another research work or to validate the truth or false of the already concluded research work.
Answer:
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Explanation:
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