Methods and integration: money, banking, and financial markets
Réponses
Assignment 2 MBF chapter 8 + 10 + 13 + 14
96 vues 0 fois vendu
Cours
Methods and integration: money, banking, and financial markets
Établissement
Radboud Universiteit Nijmegen (RU)
Book
The Economics of Money, Banking and Financial Markets
Answers study book The Economics of Money, Banking and Financial Markets of Kent Matthews, Massimo Giuliodori - ISBN: 9780273731801, Edition: Druk 1, Year of publication: - (Assignment 2)
methods and integration money banking and financial markets
methods and integration money banking and financial mar
Livre connecté
Titre de l’ouvrage:
Auteur(s):
Édition:
ISBN:
Édition:
Plus de résumés pour
Samenvatting Bank Management 2024-2025 - Handelswetenschappen Ugent
Financial market and institutions exam summary
Samenvatting / Summary FIMT The Economics of Money, Banking & Financial Markets (European edition)
Tout pour ce livre (10)
École, étude et sujet
Radboud Universiteit Nijmegen (RU)
Economie
Methods and integration: money, banking, and financial markets
Tous les documents sur ce sujet (5)
Vendeur
S'abonner
fitorezyh
Avis reçus
Aperçu du contenu
I. Stock market and efficient market hypothesis
1. Explain what (and why) is the effect of the following events on the stock price of Shell
according to the “generalized dividend valuation model”.
a) The expectations about the profits of Shell for the next years are adjusted downward.
b) The existing expectations about the profits of Shell are confirmed by recent new
information.
c) The expectations about the interest (yield to maturity) in the bond markets for the
next years are adjusted upward.
Economists mostly agree that there is a positive relation between the interest rates set by the
central bank and the value of the currency for that country. This means, that if the interest
rates increase, the value of the currency (relative to foreign currencies) also increases. On
the 19th of January 2017 the ECB made clear that they will not change the existing interest
rates.
2. Explain, for each of the following cases, what the expectations of the market concerning
the interest rates decision of the ECB were according to the “efficient market hypothesis”.
a) The value of the Euro (relative to the Dollar) did not change up to 19-1 and did not
change after 19-1.
The expectations of the market were that the future prices would not change. The future
prices are according to this hypothesis equal to the optimal forecasts.
b) The value of the Euro (relative to the Dollar) increased up to 19-1, and decreased after
19-1.
The market’s expectations of the future securities were that they would increase until 19-1.
And the expectations afterwards were that it these prices would decrease.
c) The value of the Euro (relative to the Dollar) decreased up to 19-1, and increased after
19-1.
Current prices in a financial market will be set so that the optimal forecast of a security’s
return using all available information equals the security’s equilibrium return. So at first the
expectations were that the security prices would decrease until 19-1 and after that day the
expectation was an increase in prices.
3. A public listed firm brings out a news report that shows that the profits have increased by
10% compared to the same period last year. At that moment, the stock prices of that firm
start to decrease. Explain how this is possible according to the “efficient market hypothesis”.*
According to the efficient market hypothesis this is possible, because people expect a higher
stock price next year, therefore they start buying the stocks, so the demand rises, which
leads to a decrease in stock price. Also, the expected return on a security will have a
tendency to head toward the equilibrium return that equates the quantity demanded to the
quantity supplied.
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur fitorezyh. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €2,99. Vous n'êtes lié à rien après votre achat.
