Jason Has Just Attended a Seminar in Which He Learned

question 10

Essay

Jason has just attended a seminar in which he learned about the concept of efficient
markets. He tells you what he has learned and his conclusion: "The U.S. financial
markets are largely semistrong efficient, which means that I can't expect to earn any
excess returns on my investments, no matter how much risk I take, since I don't have
any insider information. Therefore, I should just keep my money in a savings account
or invest in a risk-free asset like a Treasury bond." Comment on Jason's conclusion.

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Definitions:

Own Price Elasticity

Measures the responsiveness of the quantity demanded of a good to a change in its own price.

Anne's Apple Pies

A fictional or specific business entity known for producing or selling apple pies.

Market Share

The portion of a market controlled by a particular company or product.

Complements

Goods or services that are used together, where the consumption or use of one increases the value or demand for the other.