Discuss the problems of identifying speculative bubbles in markets

Q: Carefully explain the Arbitrage Pricing Theory (APT). What is the main assumption the APT is built…

A: Market efficiency Market efficiency theory states that all information whether it is private or…

Q: How can herding behavior and behavioral financecontribute to market bubbles?

A: Herding behavior indicates how investors tend the actions of a larger number of investors group,…

Q: Research shows that publicly available information such as dividend yields can ve used to predict…

A: Market efficiency states that the market acnnot be beaten as it incorporates all the information…

Q: Explain 'Can efficient market hypothesis and behavioural finance co-exist to explain stock return…

A: Behavioral finance, a branch of behavioral economics, presupposes that psychological impacts and…

Q: What is a "Bubble?"  Does a bubble in the Stock Market mean that the Market is not efficient?

A: A “Bubble” is an economic cycle in which the prices of asset increases rapidly followed by a…

Q: Evaluate the criticism that futures markets siphon off capital from more productive uses.

A: Future contracts are derivative instruments which are used for hedging the exposure of increase or…

Q: What is the reason for investors to track moves in the yield curve? Please discuss in more depth and…

A: A yield curve is a graphical representation of the different interest rates that the bonds yield but…

Q: What are the primary risk of trading in the fed funds markets?

A: Fed funds are short-term funds that move between different financial institutions. Generally  the…

Q: If markets are efficient, how is it possible that market bubbles and crashes occur?

A: An efficient market hypothesis is an approach to the financial market that states that the financial…

Q: Taking the Efficient Market Hypothesis into consideration, do you think we still need to study…

A: The efficient market hypothesis (EMH) explains the performance of the stock market as a reflection…

Q: 1. Discuss the nature of financial markets and the critical assumptions that financial markets are…

A: The financial market refers to a platform that provides funds from surplus units to deficit units. A…

Q: discuss  the advanatages and disadvantages of options in the financial markets?

A: Advantages: The market is in fluctuation. In these circumstances the seller and buyer should use the…

Q: Analyze the use of FX Derivatives, Cost of Capital & Dynamic Risk Management Strategies?

A: FX derivatives (Foreign exchange derivative) is defined as the financial derivative, where its…

Q: Describe how commodity futures markets can beused to reduce input price risk.

A: The futures are the types of financial derivatives in which two parties entered into a contract to…

Q: define equilibrium in financial markets in another words

A: The market where both buyer and seller interact in order to buying and selling of various financial…

Q: Rigorously define the rather vague idea of ‘beating the market’ with reference to the Efficient…

A: Efficient Market Hypothesis -  Efficient Market Hypothesis implies that  share price reflect  all…

Q: Why is it difficult to puncture a market bubble?

A: Market bubble is a bubble where the stocks in the market are traded in a price much above their…

Q: Explain how the futures markets can be used to reduce interest rate and input price risk.

A: A contract in which a seller & a buyer has an obligation to sell or buy an asset for a…

Q: Market risk arises from the level or volatility of market prices of assets. It involves the exposure…

A: Market risk is the chance of suffering losses as a result of price changes that are unfavorable for…

Q: n efficient market hypothesis and what are anomalies in the efficient market hypothesis?

A: Efficient market hypothesis is hypothesis explain the pricing in the market of equity and market…

Q: What is liquidity black holes?

A: Liquidity is when assets can be easily traded in the market with no compromise in the price of the…

Q: How does market cap effect the stock market?

A: Market capitalization is given by the formula: Market capitalization = Price per share x No. of…

Q: What are the implications of the efficient market hypothesis for investors who buy and sell stocks…

A: The efficient market hypothesis or efficient market hypothesis is also known as the random walk…

Q: Discuss how the concept of pure security, short selling and no arbitrage profit help establish and…

A: Pure security is one which pay $1 if one situation occurs and do not pay any things if other…

Q: Is the Stock Market Efficient?

A: Market efficiency can be defines as the extend up to which all the useful and important information…

Q: at markets are free of arbitrage opportunities?

A: Arbitrage opportunities are a type of strategy in which an investor tries the same asset in…

Q: Explain how a speculator can make speculation in spot, forward, and options markets. Which one do…

A: Are you an Investor or a Speculator? A Speculator is the one who makes a position whether positive…

Q: What is an efficient market and why is it important for derivatives markets?

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: explain short term trading strategy?

A: Short-term trading is a strategy in which trader aims to open and close their position of stock…

Q: Explain  the trends/updates in financial instruments traded in emerging markets ?

A: A financial instrument is defined as an agreement between two or more people that has monetary…

Q: discuss the advantages and disadvantages of options in the financial market

A: Options are financial instruments which derives its value from an underlying asset. The buyer of the…

Q: What does this implyabout detecting bubbles in the stock market?

A: Bubbles in stock market means when the prices of all the stocks exceed its fundamental value by a…

Q: Suggest what is the best financial instrument to offset market risk exposure and from market…

A: Derivatives are considered as the best financial instruments to offset the exposure of market risk…