Podcast
Questions and Answers
The debate about ______ efficiency has centered on a series of anomalies.
The debate about ______ efficiency has centered on a series of anomalies.
market
Proponents of behavioral finance suggest that these phenomena reflect ______ mispricing.
Proponents of behavioral finance suggest that these phenomena reflect ______ mispricing.
market
Traditionalists contend that markets are ______ in the sense that departures from efficiency are temporary, small and infrequent.
Traditionalists contend that markets are ______ in the sense that departures from efficiency are temporary, small and infrequent.
efficient
The traditional approach holds that markets are ______, whereas proponents of behavioral finance hold that in special circumstances, market prices tend to be inefficient.
The traditional approach holds that markets are ______, whereas proponents of behavioral finance hold that in special circumstances, market prices tend to be inefficient.
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Behaviorists contend that because of behavioral phenomena, there are particular circumstances in which departures from ______ are likely to be large and occur for long periods of time.
Behaviorists contend that because of behavioral phenomena, there are particular circumstances in which departures from ______ are likely to be large and occur for long periods of time.
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The traditional approach contends that these phenomena can be explained by compensation for ______.
The traditional approach contends that these phenomena can be explained by compensation for ______.
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Imagine the financial ______ of a privately held firm that does not plan on raising external funds for at least two years.
Imagine the financial ______ of a privately held firm that does not plan on raising external funds for at least two years.
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The traditional ______ efficient-market based advice is that managers should not try to time markets.
The traditional ______ efficient-market based advice is that managers should not try to time markets.
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The IPO offer price is typically determined in a ______ meeting between the firm’s executives and the underwriters taking the firm public.
The IPO offer price is typically determined in a ______ meeting between the firm’s executives and the underwriters taking the firm public.
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The existence of initial underpricing suggests that on average, executives agree to an offer price that is too ______, that they do not bargain hard enough.
The existence of initial underpricing suggests that on average, executives agree to an offer price that is too ______, that they do not bargain hard enough.
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Proponents of market efficiency suggest that long-term underperformance can be explained by factors such as ______ and book-to-market equity.
Proponents of market efficiency suggest that long-term underperformance can be explained by factors such as ______ and book-to-market equity.
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When the firm needs external funds, the executive plans to raise funds through an ______,
When the firm needs external funds, the executive plans to raise funds through an ______,
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Behaviorists view short-term ______ as evidence against weak-form efficiency.
Behaviorists view short-term ______ as evidence against weak-form efficiency.
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Analysts and investors ______ to new information.
Analysts and investors ______ to new information.
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Overconfident investors will tend to ______ to good news that occurs subsequently.
Overconfident investors will tend to ______ to good news that occurs subsequently.
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Risk aversion predisposes investors to ______ the stock at a gain relative to the original purchase price.
Risk aversion predisposes investors to ______ the stock at a gain relative to the original purchase price.
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The stocks of firms giving rise to positive earnings surprises experience ______ after the announcement.
The stocks of firms giving rise to positive earnings surprises experience ______ after the announcement.
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Aversion to sure loss predisposes investors to ______ their losers.
Aversion to sure loss predisposes investors to ______ their losers.
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Exhibit 5.2 displays the general finding about the ______ underperformance for the period 1970-2002.
Exhibit 5.2 displays the general finding about the ______ underperformance for the period 1970-2002.
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The shares of issuing firms began to ______ the shares of similar firms that did not issue new shares.
The shares of issuing firms began to ______ the shares of similar firms that did not issue new shares.
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Over a five-year horizon, IPOs ______ by 2.4 percent a year.
Over a five-year horizon, IPOs ______ by 2.4 percent a year.
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Maximizing market value in the short-term might well require going ______ in a hot issue market and paying for all-star analyst coverage.
Maximizing market value in the short-term might well require going ______ in a hot issue market and paying for all-star analyst coverage.
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To the extent that market prices revert to ______ value in the long-term, maximizing long-term value corresponds to the conventional approach based on NPV.
To the extent that market prices revert to ______ value in the long-term, maximizing long-term value corresponds to the conventional approach based on NPV.
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The three ______ phenomena present executives with something of a dilemma.
The three ______ phenomena present executives with something of a dilemma.
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To the extent that the impact of size, book-to-market equity, and momentum on expected returns stems from ______ mispricing rather than fundamental risk,
To the extent that the impact of size, book-to-market equity, and momentum on expected returns stems from ______ mispricing rather than fundamental risk,
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Managers’ forecasts exhibit ______ bias.
Managers’ forecasts exhibit ______ bias.
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The evidence presented throughout this text suggests that managers do not compute ______ correctly.
The evidence presented throughout this text suggests that managers do not compute ______ correctly.
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Doing so requires that managers prepare unbiased forecasts of cash flow, the market risk ______, and risk.
Doing so requires that managers prepare unbiased forecasts of cash flow, the market risk ______, and risk.
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Fox, J., “Learn to Play the ______ Game (and Wall Street Will Love You).”
Fox, J., “Learn to Play the ______ Game (and Wall Street Will Love You).”
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