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Suppose Researchers Know That Two Species of Fish Began Diverging

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Suppose researchers know that two species of fish began diverging from a common ancestor when they were separated by the formation of the Isthmus of Panama 6 million years ago.The genetic divergence between these two species at the hypothetical HYR gene is 3 percent.The ZTG1 gene evolves twice as fast as the HYR gene.Assuming a molecular clock, you would expect a _______ percent genetic divergence at ZTG1 between two species of fish that diverged a million years ago.

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Definitions:

Weak Form

Assumes that all information contained in past price movements is fully reflected in current market prices. Thus, information about recent trends in a stock’s price is of no use in selecting a stock.

Semistrong Form

States that current market prices reflect all publicly available information. Therefore, the only way to gain abnormal returns on a stock is to possess inside information about the company’s stock.

Stock Market Efficiency

The concept that all available information is reflected in stock prices, thus making it impossible to consistently achieve higher returns than the overall market.

Nonconstant Growth Model

A valuation approach for stocks that assumes a company's dividends will grow at different rates in different periods, unlike the constant growth model.

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