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DochEvi [55]
2 years ago
14

If you believe in the ________ form of the EMH, you believe that stock prices reflect all relevant information including histori

cal stock prices and current public information about the firm, but not information that is available only to insiders.A. semistrongB. strongC. weakD. semistrong, strong, and weakE. hard
Business
1 answer:
Alex2 years ago
3 0

Answer:

A)semistrong

Explanation:

As regards to finance, the efficient-market hypothesis known as "EMH"

gives assertion that financial markets can be regards as "informationally efficient. ”

The EMH three forms which are:

1)weak

2) semi-strong

3)strong

it gives evaluation of the influence that MNPI(material Nonpublic Information ) has on market prices. It explains that when markets are efficient then the current prices reflect all information.

Semi-strong-form give a claim that prices gives reflection of all publicly available information, it also claims that

that prices instantly change to to gives a reflection of new public information.

The weak-form gives a claim that prices that is on traded assets such as bonds or stock gives reflection of

all publicly available information in the past . It should be noted that If you believe in the semistrong form of the EMH, you believe that stock prices reflect all relevant information including historical stock prices and current public information about the firm, but not information that is available only to insiders.

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its demand increases and when the price of a commodity rises,

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A firm purchased $120,000 worth of light general-purpose trucks. The operations of the trucks lead to annual income of $60,000 f
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The before-tax IRR is 37.93%

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The internal rate of return (IRR) is defined as the return rate on a project investment project over a periodic lifespan.

It is also referred to as the net present value of an investment project which is zero. It can be expressed by using the formula:

\mathbf{0= NPV \sum \limits ^{T}_{t=1} \dfrac{C_t}{(1+1RR)^t}- C_o}

where;

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  • \mathbf{C_o=} Total initial investment cost

<h3>(a)</h3>

For the before-tax IRR:

The cash outflow = $120000

Cash Inflow for the first three years = $60000

Cash inflow for the fourth year = $60000 + $20000 = $80000

∴

Using the above formula, we have:

\mathbf{0 = \dfrac{60000}{(1+r)^1}+ \dfrac{60000}{(1+r)^2}+ \dfrac{60000}{(1+r)^3}+ \dfrac{80000}{(1+r)^4}}

By solving the above equation:

r = 37.93%

<h3>(b) </h3>

For the after-tax IRR:

The cash outflow = $120000

Recall that:

  • Cash Inflow = Cash inflow × Tax rate

∴

For the first three years; the cash inflow is:

\mathbf{=60000 -(60000\times 0.3)  } \\ \\ \mathbf{ = 60000 -18000}  \\ \\ \mathbf{ = 42000}

For the fourth year, the cash inflow is

\mathbf{=80000 -(60000\times 0.3)  } \\ \\ \mathbf{ = 80000 -18000}  \\ \\ \mathbf{ = 62000}

Using the above IRR formula:

\mathbf{0 = \dfrac{42000}{(1+r)^1}+ \dfrac{42000}{(1+r)^2}+ \dfrac{42000}{(1+r)^3}+ \dfrac{62000}{(1+r)^4}}

By solving the above equation:

r = 19.32%

Learn more about the internal rate of return (IRR) here:

brainly.com/question/24301559

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Answer:

option a

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the standard deviation is a better measure of risk than the coefficient of variation if the expected returns of the securities b
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Answer:

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