Questions from General Investment

Q: What is meant by data mining, and why must technical analysts

What is meant by data mining, and why must technical analysts be careful not to engage in it?

Q: Table 12A presents price data for Computers, Inc., and a

Table 12A presents price data for Computers, Inc., and a computer industry index. Does Computers, Inc., show relative strength over this period?

Q: Using the data in Table 12A, compute a five-day

Using the data in Table 12A, compute a five-day moving average for Computers, Inc. Can you identify any buy or sell signals?

Q: Why would an advocate of the efficient market hypothesis believe that even

Why would an advocate of the efficient market hypothesis believe that even if many investors exhibit the behavioral biases discussed in the chapter, security prices might still be set efficiently?

Q: Log in to Connect and link to the material for Chapter 12

Log in to Connect and link to the material for Chapter 12, where you will find five years of weekly returns for the S&P 500. a. Set up a spreadsheet to calculate the 26-week moving average of the inde...

Q: Briefly explain whether investors should expect a higher return on portfolio A

Briefly explain whether investors should expect a higher return on portfolio A than on portfolio B according to the capital asset pricing model.

Q: Log in to Connect and link to the material for Chapter 12

Log in to Connect and link to the material for Chapter 12, where you will find five years of weekly returns for the S&P 500 and Fidelity’s Select Banking Fund (ticker FSRBX). a. Set up a spreadsheet t...

Q: What sorts of factors might limit the ability of rational investors to

What sorts of factors might limit the ability of rational investors to take advantage of any “pricing errors” that result from the actions of “behavioral investors”?

Q: Even if behavioral biases do not affect equilibrium asset prices, why

Even if behavioral biases do not affect equilibrium asset prices, why might it still be important for investors to be aware of them?

Q: Some advocates of behavioral finance agree with efficient market advocates that indexing

Some advocates of behavioral finance agree with efficient market advocates that indexing is the optimal investment strategy for most investors. But their reasons for this conclusion differ greatly. Co...