Do you think investors can earn abnormal returns

Do you think investors can earn abnormal returns

Subject: Business    / Finance   
Question

Question 1

Text Book Question 3-3

Do you think investors can earn abnormal returns in financial markets that are at least semi-strong form efficient?

Question 2

Read the article” Where to list: NYSE or Nasdaq?” by accessing the link

Where to list: NYSE or Nasdaq?

Enumerate at least two differences between NSYE and NASDAQ that are not mentioned on the slides.

Question 3

Text Book Question 3-3

At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8 percent compounded annually.

    How much is in the account today?
    How much would be in the account if the deposits were made at the beginning of each year rather than at the end of each year?

Question 4

What is the present value of a perpetuity of $100 per year if the appropriate discount rate is 7 percent? If interest rates in general were to double and the appropriate discount rate rose to 14 percent, what would happen to the present value of the perpetuity?

PVP=$Perpetuity/discount rate

Question 5

Suppose that today (January 1) you deposited $1,000 into a savings account that pays 8 percent.

a. If the bank compounds interest annually, how much will you have in your account three years from today?

b. What would your balance be in three years if the bank used quarterly compounding rather than annual compounding?

c. Suppose you deposited the $1,000 in four payments of $250 each on January 1 of the next four years, beginning one year from today. How much would you have in your account in four years when the last deposit is made assuming that interest is 8 percent compounded annually?