Questions from Financial Markets

Q: The following table lists foreign exchange rates between U.S.

The following table lists foreign exchange rates between U.S. dollars and British pounds (GBP) during April. Which day would have been the best day to convert $200 into British pounds? Which day wo...

Q: Looking at Figure 1.3, in what years would you

Looking at Figure 1.3, in what years would you have chosen to visit the Grand Canyon in Arizona rather than the Tower of London? Figure 1.3:

Q: Can we expect the value of the dollar to rise by 2

Can we expect the value of the dollar to rise by 2% next week if our expectations are optimal?

Q: “If stock prices did not follow a random walk, there

“If stock prices did not follow a random walk, there would be unexploited profit opportunities in the market.” Is this statement true, false, or uncertain? Explain your answer.

Q: If my broker has been right in her five previous buy and

If my broker has been right in her five previous buy and sell recommendations, should I continue listening to her advice?

Q: Can a person with optimal expectations expect the price of Google to

Can a person with optimal expectations expect the price of Google to rise by 10% in the next month?

Q: If I read in the Wall Street Journal that the “smart

If I read in the Wall Street Journal that the “smart money” on Wall Street expects stock prices to fall, should I follow that lead and sell all my stocks?

Q: “If most participants in the stock market do not follow what

“If most participants in the stock market do not follow what is happening to the monetary aggregates, prices of common stocks will not fully reflect information about them.” Is this statement true, fa...

Q: “An efficient market is one in which no one ever profits

“An efficient market is one in which no one ever profits from having better information than the rest.” Is this statement true, false, or uncertain? Explain your answer.

Q: If higher money growth is associated with higher future inflation and if

If higher money growth is associated with higher future inflation and if announced money growth turns out to be extremely high but is still less than the market expected, what do you think would happe...