Homework Help is Here – Start Your Trial Now!
Business
Finance
An optimal forecast made using rational expectations provides a certain rate of return for a stock. When new information directs to a lower forecast price for the stock. O Rate of return will be lower O Current price of the stock will go down O Rate of return will be higher Current price of the stock will go up

An optimal forecast made using rational expectations provides a certain rate of return for a stock. When new information directs to a lower forecast price for the stock. O Rate of return will be lower O Current price of the stock will go down O Rate of return will be higher Current price of the stock will go up

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 18PROB
See similar textbooks
icon
Related questions
Question
A4 answer the questions below
An optimal forecast made using rational expectations provides a certain rate of return for a stock. When new information directs to a lower forecast price for the stock. Rate of return will be lower O Current price of the stock will down go O Rate of return will be higher O Current price of the stock will go up Question 10 The forecast made using all available information for the price of a certain stock is $20. The realized price was $22. This shows that. O The error could have been predicted O The forecaster made a mistake O The forecast was a rational expectations forecast O The forecast was an adaptive expectations forecast 7,670 FEB 25 W
Transcribed Image Text:An optimal forecast made using rational expectations provides a certain rate of return for a stock. When new information directs to a lower forecast price for the stock. Rate of return will be lower O Current price of the stock will down go O Rate of return will be higher O Current price of the stock will go up Question 10 The forecast made using all available information for the price of a certain stock is $20. The realized price was $22. This shows that. O The error could have been predicted O The forecaster made a mistake O The forecast was a rational expectations forecast O The forecast was an adaptive expectations forecast 7,670 FEB 25 W
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Risk and Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS