Explain the argued of Eugene Fama regarding excess return
Explain the argued of Eugene Fama regarding excess return.
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Fama argued that since there are many more active, intelligent and well-informed market participants’ securities will be priced to reflect all available information. Therefore was born the idea of the efficient market, one where this is impossible to beat that market.
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Describe triangular arbitrage? What is a condition which will give increase to a triangular arbitrage opportunity?Triangular arbitrage is the procedure of trading out of the U.S. dollar in a second currency, then trading it for a third currency
Assume that the treasurer of IBM contains an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 8% per annum in the U.S. and 6% per annum in Germany. Now, the spot exchange rate is DM1.60 per dollar and the six-month forw
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You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would generate $3,000,000 after the taxes were paid. The
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At Milan bourse, Fiat stock closed at EUR31.90 per share on Friday, September 10, 1999. Fiat trades as & ADR on the NYSE. One underlying Fiat shares equivalent one ADR. On September 10, the $/EUR spot exchange rate was $1.0367/EUR1.00. At this exchange
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