1718.wolfware.nesu.edu NC STATE Courses 2017-201% Question 21 Fundamental analys

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1718.wolfware.nesu.edu NC STATE Courses 2017-201% Question 21 Fundamental analysis of the following is t the stock of Gold Fish corporation has a present value that is lower than its price. Which Select one: A. This stock is overvalued. B. This stock is undervalued. C. The stock will be rapidly gaining value. D. The stock will be rapidy losing value. Queston 22 Suppose you believe in the efficient markets hypothesis. Which of the following is true? Points ous of Select one AYu beieve that stock pnces ne er follow a random welk. B. You believe that stock prices follow a random wak C. You do not belleve that there is positive relationship between risk and resurn. . D. You believe that the stock market is informationally inetficient Queston 23 The efficient market hypothesis impies that news has no effect on stock prices Points out of Select one A. True 3

Explanation / Answer

A) stock is over valued.

B ) stock prices follow random walks according to EMH.

A) true, as per the EMH market prices reflect full information and in this case will render the news ineffective.

C) 11, using rule 72 , we get time required to double as 72/ 7 =10.28 . This must be rounded up to 11.

B) false, government deficit increases demand for loanble funds and doesnt decrease supply.

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