Explain Why It Is That in an Efficient Market,investments Have

question 64

Essay

Explain why it is that in an efficient market,investments have an expected NPV of zero.

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Definitions:

Individual Mobility

The ability of an individual to move within or between social strata or occupational positions in a society.

Stereotype Threat

The risk of confirming, as self-characteristic, a negative stereotype about one's group, which can reduce the performance in affected individuals.

Self-Fulfilling

Self-fulfilling refers to a prediction or expectation that causes itself to become true due to the behavior that it inspires.

Collective Self-Esteem

Describes the self-evaluation of one's social group or community as a part of an individual's self-worth.