Question
1. Which of the following is true?
A random walk for stock price changes is inconsistent with observed patterns in price changes.
If the stock market follows a random walk, price changes should be highly correlated.
If the stock market is weak form efficient, then stock prices follow a random walk.
All of these.
Both If the stock market follows a random walk, price changes should be highly correlated; and If the stock market is weak form efficient, then stock prices follow a random walk.
2. You are planning a trip to Australia. Your hotel will cost you A$150 per night for five nights. You expect to spend another A$2,000 for meals, tours, souvenirs, and so forth. How much will this trip cost you in U.S. dollars given the following exchange rates?
$1,926
$2,007
$2,782
$2,856
$3,926
3. A 12year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%?
11.11% decrease
12.38% decrease
12.38% increase
14.13% decrease
14.13% increase


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