Investments

Assignment 3: Market Efficiency Note: What I wrote down the stairs is just a quick chalk out of possible/ apt reactions. This assignment was basically a solicitation of ten essays. So there is not really a right and defame answer. But there atomic number 18 answers that apply sense and most that do not. The ones below are more or less that make sense. 1. On TV, a stellar financial psychoanalyst was being interviewed by a journalist (CNN I believe). here(predicate) is the conversation: give the stock-markets be split off if crotch hair wins? First, my gut-feeling is that political leaders may affair for individual stocks untold(prenominal) as oil stocks but it does not really matter for stock-markets overall. [As a really rough proof, the stock-market rarely moves by much than 1% about election result announcement date]. Hence, I dont expect the S&P 500 to be very sensitive to who is in the house, a priori. Now total the data. The question is now: is t he difference statistically and economically prodigious? Are there any outliers? This is specially relevant because if a crash is random (like October 1987), then the chairwoman has no big businessman over it and it will step to the fore that the professorship with bad peril is a bad president for stocks; which would be inappropriate.

Of course, this raises the issue of what causes a crash and we dont really have an answer but it is reasonable [although withal debatable] to say that public constitution has a minor involve on a stock-market crash. In addition, the belief that the stock-markets are better-off at a lower place Republicans is not at suspect with the piece of evidenc e presented above. If investors prefer inves! ting in stocks under(a) Republicans, maybe because they perceive the stock-market to be less risky [or the familiarity to be less uncertain, company profits to be more protected, shareholder interests to be more protected], then they supplicate a lower risk premium. It is a classical crash away to think that if returns are high it means that the companies are better run. Returns are high either because prices...If you want to set off a full essay, order it on our website: OrderEssay.net

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