finance ch 14 smartbook
______ is the process of buying underpriced securities while selling overpriced substitutes.
Arbitrage
Serial ______ is the relationship between the current return on a security and the return on the same security over a later period.
Correlation
An efficient market is one in which any change in available information will be reflected in the company's stock price ______.
Immediately
An efficient market is one that fully reflects all available ______.
Information
Which of the following is true about the IPO market?
Large initial gains in stock prices often occur.
Investors who jump into a hot market believing that the high returns will continue for an even longer period are said to exhibit ______.
Representativeness
The investor trait of ______ occurs when investors draw conclusions from insufficient data.
Representativeness
If you beat the market with inside information, you have violated the concept of ______ form efficiency.
Strong
The evidence clearly does not support the existence of ______ form efficiency in the stock market.
Strong
True or false: Arbitrage is more risky than it appears at first glance.
True
The market return used in the abnormal return definition is based on ______.
a broad-based stock market index
An abnormal return is defined as ______.
a stock's actual return minus the market return
If you can beat the market by ______, then you are violating weak form efficiency.
analyzing historical price patterns
A short sale occurs if the seller initially__ the asset and then sells it.
borrows
Different types of information will affect stock prices ______.
differently
The types of equity and debt to sell is an example of a(n) ______.
financing decision
It is not uncommon for IPOs to ______ experience large gains.
initially
The serial correlation of a stock's returns is different from the correlation between the returns of two different stocks because it ______.
only involves the returns of one stock
Weak form efficiency considers trading strategies that use information based solely on ______ stock prices.
past
What types of information affect the rates at which stock prices adjust to new information?
past information publicly available information all information
A market is said to be ______ form efficient if prices incorporate all publicly available information.
semi strong
Which of the following have empirical support
semi strong weak
A __ sale occurs if the seller borrows the asset and then sells it.
short
Typical financing decisions include ______.
when to sell equity and debt how much equity and debt to sell the types of equity and debt to sell