Your investment client asks for information concerning the benefits of active portfolio management. She is particularly interested in the question of whether active managers can be expected to consistently exploit inefficiencies in the capital markets to produce above-average returns without assuming higher risk.

The semistrong form of the efficient market hypothesis asserts that all publicly available information is rapidly and correctly reflected in securities prices. This implies that investors cannot expect to derive above-average profits from purchases made after information has become public because security prices already reflect the information’s full effects.

a. Identify and explain two examples of empirical evidence that tend to support the EMH implication stated above.

b. Identify and explain two examples of empirical evidence that tend to refute the EMH implication stated above.

c. Discuss reasons why an investor might choose not to index even if the markets were, in fact, semistrong-form efficient.

How does the speed of a light wave vary with the index of refraction?

what is the relationship between the index of refraction and wave speed ratio?

Some lending institutions calculate the monthly payment $M$ on a loan of $L$ dollars at an interest rate $r$ (expressed as a decimal) by using the formula

$$M=\frac{L r k}{12(k-1)},$$

where $k=[1+(r / 12)]^{12 t}$ and $t$ is the number of years that he loan is in effect.

Home mortgage,

Find the monthly payment on a $30$-year $\$ 250,000$ home mortgage if the interest rate is $8 \%$.

How does the speed of light change as the index of refraction increases?

One theory concerning the S&P 500 Index is that if it increases during the first five trading days of the year, it is likely to increase during the entire year. From 1950 through 2012, the S&P 500 Index had these early gains in 40 years (in 2011 there was virtually no change). In 35 of these 40 years, the S&P 500 Index increased for the entire year. Assuming that this indicator is a random event with no predictive value, you would expect that the indicator would be correct 50% of the time. What is the probability of the S&P 500 Index increasing in 35 or more years if the true probability of an increase in the S&P 500 Index is

a. 0.50?

b. 0.70?

c. 0.90?

d. Based on the results of (a) through (c), what do you think is the probability that the S&P 500 Index will increase if there is an early gain in the first five trading days of the year? Explain.

To get total internal reflection at the interface of water (refractive index 1.33) and a plastic whose refractive index is 1.46: Which material must the light start in? (1) It doesn't matter, (2) Water, (3) Plastic.

The stem-and-leaf plot below summarizes the total deposits (in hundreds of millions of dollars) for the savings institutions in the state of Maryland in 2012.

Units: $6 \mid 5=\$ 65$ hundred million

(a) Describe the shape of the distribution.

(b) Find the median.

Boran Stockbrokers, Inc., selects four stocks for the purpose of developing its own index of stock market behavior. Prices per share for a 2007 base period, January 2009, and March 2009 follow. Base-year quantities are set on the basis of historical volumes for the four stocks.

$$\begin{matrix} \text{ } & \text{ } & \text{ } & \text{ } & \text{Price per Share (\$)}\\ \text{ } & \text{ } & \text{2007} & \text{2007} & \text{January} & \text{March}\\ \text{Stock} & \text{Industry} & \text{Quantity} & \text{Base} & \text{2009} & \text{2009}\\ \hline \text{A} & \text{Oil} & \text{100} & \text{31.50} & \text{22.75} & \text{22.50}\\ \text{B} & \text{Computer} & \text{150} & \text{65.00} & \text{49.00} & \text{47.50}\\ \text{C} & \text{Steel} & \text{75} & \text{40.00} & \text{32.00} & \text{29.50}\\ \text{D} & \text{Real Estate} & \text{50} & \text{18.00} & \text{6.50} & \text{3.75}\\ \end{matrix}$$

Use the 2007 base period to compute the Boran index for January 2009 and March 2009. Comment on what the index tells you about what is happening in the stock market.

A wide receiver catches a ball and begins to run for the endzone following a path defined by $(x-5, y-50)=t(0,-10)$. A defensive player chases the receiver as soon as he starts running following a path defined by $(x-10, y-54)=t(-0.9,-10.72)$. If the receiver catches the ball on the 50 -yard line (y=50), will be reach the goal line (y=0) before the defensive player catches him?

Find the Gini index for the given Lorenz curve. $L(x) = x^3$

Simplify by reducing the index of the radical.

$$\sqrt[9]{x^6 y^3}$$

Realtors use an index to compare housing prices in major cities. The housing price index values for several cities are given in the table below. Use the following formula to answer the question.

$$\underset{\text { (other town) }}{\text { price }}=\underset{\text { (your town) }}{\text { price }} \times \frac{\text { index of other town }}{\text { index in your town }}$$

$$\begin{array}{lc|lc} \text { City } & \text { Index } & \text { City } & \text { Index } \\ \hline \text { Atlanta } & 100 & \text { Las Vegas } & 115 \\ \text { Boston } & 146 & \text { Los Angeles } & 190 \\ \text { Chicago } & 105 & \text { Miami } & 161 \\ \text { Dallas } & 121 & \text { Phoenix } & 122 \\ \text { Denver } & 136 & \text { San Franciscol } & 172 \end{array}$$

For a house valued at $\$ 300,000$ in Dallas, find out the price of a comparable house in San Francisco.

Murray Company acquired $100,000 face value of the outstanding bonds of Campbell Company on January 1, 2013. The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 6% and mature on December 31, 2016. The market priced these bonds on January 1, 2013, to yield 8% compounded semiannually. Murray Company classifies these bonds as held-to-maturity securities.

c. Give the journal entries that Murray Company would make to account for these bonds during 2013.