Boundless Lecture Slides
Available on the Boundless Teaching Platform
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless Teaching
Platform
Boundless empowers educators to engage their students
with affordable, customizable textbooks and intuitive
teaching tools. The free Boundless Teaching Platform
gives educators the ability to customize textbooks in
more than 20 subjects that align to hundreds of popular
titles. Get started by using high quality Boundless books,
or make switching to our platform easier by building from
Boundless content pre-organized to match the assigned
textbook. This platform gives educators the tools they
need to assign readings and assessments, monitor
student activity, and lead their classes with pre-made
teaching resources.
Using Boundless Presentations
The Appendix
The appendix is for you to use to add depth and
breadth to your lectures. You can simply drag and
drop slides from the appendix into the main
presentation to make for a richer lecture
experience.
Get started now at:
http://boundless.com/teaching-platform
Free to edit, share, and copy
Feel free to edit, share, and make as many copies
of the Boundless presentations as you like. We
encourage you to take these presentations and
make them your own.
If you have any questions or problems please email:
educators@boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
About Boundless
Boundless is an innovative technology company making education more affordable and
accessible for students everywhere. The company creates the world’s best open educational
content in 20+ subjects that align to more than 1,000 popular college textbooks. Boundless
integrates learning technology into all its premium books to help students study more efficiently
at a fraction of the cost of traditional textbooks. The company also empowers educators to
engage their students more effectively through customizable books and intuitive teaching tools
as part of the Boundless Teaching Platform. More than 2 million learners access Boundless free
and premium content each month across the company’s wide distribution platforms, including its
website, iOS apps, Kindle books, and iBooks. To get started learning or teaching with
Boundless, visit boundless.com.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market
Efficiency and
Returns
The Security Markets
Understanding Returns
Market Efficiency
Market Regulation
Boundless.com/finance?campaign_content=book_192_ch
apter_9&campaign_term=Finance&utm_campaign=power
point&utm_medium=direct&utm_source=boundless
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns > The Security Markets
The Security Markets
• Types of Stock Market Transactions
• Types of Market Organizations
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance?campaign_content=book_192_chapter_9&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=dire
ct&utm_source=boundless
Security Market Efficiency and Returns > The Security Markets
Types of Stock Market Transactions
• An initial public offering (IPO), or stock market launch, is a type of public offering
where shares of stock in a company are sold to the general public, on a securities
exchange, for the first time.
• A secondary market offering is a registered offering of a large block of a security
that has been previously issued to the public.
• In the secondary market, securities are sold by and transferred from one investor
or speculator to another. It is therefore important that the secondary market
remain highly liquid.
• Private placement (or non-public offering) is a funding round of securities which
are sold not through a public offering, but rather through a private offering, mostly
Secondary market
View on Boundless.com
to a small number of chosen investors.
• Stock repurchase (or share buyback) is the reacquisition by a company of its own
stock.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/the-security-markets-83/types-ofstock-market-transactions-357-
Security Market Efficiency and Returns > The Security Markets
Types of Market Organizations
• The primary market is that part of the capital markets that deals with the issue of
new securities.
• Over-the-counter (OTC) or off-exchange trading is to trade financial instruments
such as stocks, bonds, commodities, or derivatives directly between two parties.
• The secondary market, also called aftermarket, is the financial market in which
previously issued financial instruments such as stock, bonds, options, and futures
are bought and sold.
• One type of market structure is the auction market, where buyers and sellers are
brought together directly, announcing the prices at which they are willing to buy or
NASDAQ
sell securities.
View on Boundless.com
• Broker markets are usually only used for securities that have no public market,
necessitating the middleman in the form of a broker. The broker works for a client
to find a suitable trading partner.
• Dealer markets, also called quote-driven markets, centers on market-makers (or
dealers) who provide the service of continuously bidding for securities that
investors want to sell and offering securities that investors want to buy.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/the-security-markets-83/types-ofmarket-organizations-358-
Security Market Efficiency and Returns > Understanding Returns
Understanding Returns
• Reporting
• Dollar Returns
• Percentage Returns
• Historical Returns: Market Variability and Volatility
• Calculating and Understanding Average Returns
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance?campaign_content=book_192_chapter_9&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=dire
ct&utm_source=boundless
Security Market Efficiency and Returns > Understanding Returns
Reporting
• Realized returns involve the sale of the asset while unrealized returns are based
off of changes in the market value, but not a sale.
• Realized returns are taxed, while unrealized returns are not.
• When the value of an asset is based off of the market value at the end of the
reporting period, the company is using the mark-to-market valuation method.
IRS
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/understanding-returns-84/reporting359-
Security Market Efficiency and Returns > Understanding Returns
Dollar Returns
• Dollar returns do not take into account things like the time value of money or the
time frame of the investment.
• In security markets, the dollar return of the security is the difference in the final
market price and the market price at which it was purchased.
• Dollar returns are useful for determining the nominal amount that the firm's assets
will change.
Dollar Profit/(Loss)
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/understanding-returns-84/dollarreturns-360-
Security Market Efficiency and Returns > Understanding Returns
Percentage Returns
• Total percentage returns divide the dollar returns by the initial value of the
investment. This is also the return on investment (ROI).
• Annual returns show the percentage by which the value of the asset changes in
each individual year.
• Average annual percentage returns can be calculated by dividing ROI by the
number of years, or by other methods such as the compound annual growth rate
(CAGR) or internal rate of return (IRR).
Cash Flow Return
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/understanding-returns84/percentage-returns-361-
Security Market Efficiency and Returns > Understanding Returns
Historical Returns: Market Variability and Volatility
• Historical returns do not guarantee future returns.
• All markets have a degree of systemic risk which means that they have a risk of
collapsing due to external factors. Companies are also interconnected, so the
failure of one company can have far-reaching effects.
• "Animal spirits" describes general investor sentiment which can affect markets,
even without changes in the underlying financials.
DJIA 1900-2009
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/understanding-returns-84/historicalreturns-market-variability-and-volatility-362-
Security Market Efficiency and Returns > Understanding Returns
Calculating and Understanding Average Returns
• Average return on investment (ROI) is the arithmetic average of the total cash
returns divided by the initial investment. It is useful for quick calculations and
specific securities (such as bonds purchased at par), but does not account for
compounding returns.
• Compound annual growth rate (CAGR) is derived from the future value formula
with compounding interest. It accounts for compounding returns.
• Internal rate of return (IRR) is the discount rate at which the NPV equals 0. It is
used because it allows for easy comparison between investment options and is
easy to understand.
Internal Rate of Return
• For all three methods, the higher the average rate of return, the more attractive
View on Boundless.com
the investment is.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/understanding-returns-84/calculatingand-understanding-average-returns-363-
Security Market Efficiency and Returns > Market Efficiency
Market Efficiency
• Behavior of an Efficient Market
• The Efficient Market Hypothesis
• Implications and Limitations of the Efficient Market Hypothesis
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance?campaign_content=book_192_chapter_9&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=dire
ct&utm_source=boundless
Security Market Efficiency and Returns > Market Efficiency
Behavior of an Efficient Market
• The efficient-market hypothesis (EMH) asserts that financial markets are
"informationally efficient. " As a result, one cannot consistently achieve returns in
excess of average market returns on a risk-adjusted basis, given the information
available at the time the investment is made.
• Historically, there was a very close link between EMH and the random-walk model
and then the Martingale model. The random character of stock market prices was
first modelled by Jules Regnault, a French broker, in 1863.
• The definitions for three forms of financial market efficiency: weak, semi-strong,
and strong.
Random Walk
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-efficiency-85/behavior-of-anefficient-market-364-
Security Market Efficiency and Returns > Market Efficiency
The Efficient Market Hypothesis
• In weak-form efficiency, future prices cannot be predicted by analyzing prices
from the past.
• In semi-strong-form efficiency, it is implied that share prices adjust to publicly
available new information very rapidly and in an unbiased fashion, such that no
excess returns can be earned by trading on that information.
• In strong-form efficiency, share prices reflect all information, public and private,
and no one can earn excess returns.
Efficient market response
View on Boundless.com
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-efficiency-85/the-efficientmarket-hypothesis-365-
Security Market Efficiency and Returns > Market Efficiency
Implications and Limitations of the Efficient Market Hypothesis
• Empirical evidence has been mixed, but has generally not supported strong forms
of the Efficient Market Hypothesis.
• Speculative economic bubbles are an obvious anomaly in that the market often
appears to be driven by buyers operating on irrational exuberance, who take little
notice of underlying value.
• Any anomalies pertaining to market inefficiencies are the result of a cost benefit
analysis made by those willing to incur the cost of acquiring the valuable
information in order to trade on it.
• The financial crisis of 2007–2012 has led to renewed scrutiny and criticism of the
hypothesis, claiming that belief in the hypothesis caused financial leaders to adopt
2008 Financial Crisis
View on Boundless.com
a "chronic underestimation of the dangers of asset bubbles breaking".
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-efficiency-85/implications-andlimitations-of-the-efficient-market-hypothesis-366-
Security Market Efficiency and Returns > Market Regulation
Market Regulation
• Securities Act of 1933
• Securities Exchange Act of 1934
• Securities Acts Amendments of 1975
• Sarbanes–Oxley Act of 2002
• Global Research Settlement
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance?campaign_content=book_192_chapter_9&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=dire
ct&utm_source=boundless
Security Market Efficiency and Returns > Market Regulation
Securities Act of 1933
• The Act's objectives are to provide investors with material financial and other
corporate information about issuers of public securities.
• The primary purpose of the 1933 Act is to ensure that buyers of securities receive
complete and accurate information before they invest.
• Among other things, registration forms call for: a description of the securities to be
offered for sale; information about the management of the issuer; information
about the securities (if other than common stock); and financial statements
certified by independent accountants.
• Rule 144, promulgated by the SEC under the 1933 Act, permits, under limited
circumstances, the sale of restricted and controlled securities without registration.
US SEC
View on Boundless.com
• Regulation S is a "safe harbor" that defines when an offering of securities is
deemed to be executed in another country and therefore not be subject to the
registration requirement under section 5 of the 1933 Act.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-regulation-86/securities-actof-1933-367-
Security Market Efficiency and Returns > Market Regulation
Securities Exchange Act of 1934
• The Securities Exchange Act of 1934 is a law governing the secondary trading of
securities in the United States of America. The Act and related statutes form the
basis for the regulation of the financial markets and their participants in the United
States.
• One area subject to 34 Act regulation is the actual securities exchange: New York
Stock Exchange, the American Stock Exchange, and regional exchanges like the
Cincinnati Stock Exchange, Philadelphia Stock Exchange and Pacific Stock
Exchange.
• The '34 Act also regulates broker-dealers without a status for trading securities. A
telecommunications infrastructure was developed to provide for trading without a
Securities Exchange Act of 1934
View on Boundless.com
physical location.
• In 1938 the Exchange Act was amended by the Maloney Act, which authorized
the formation and registration of national securities associations to supervise the
conduct of their members subject to the oversight of the SEC.
• In the last 30 years, brokers have created two additional systems for trading
securities. The alternative trading system, or ATS, is a quasi exchange where
stocks are commonly purchased and sold through a smaller, private network of
brokers, dealers, and other market participants.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-regulation-86/securitiesexchange-act-of-1934-368-
Security Market Efficiency and Returns > Market Regulation
Securities Acts Amendments of 1975
• The 1975 amendments, also called the National Exchange Market System Act,
directed the securities and exchange commission to work with the industry toward
establishing a national market system together with a system for the nationwide
clearance and settlement of securities transactions.
• The National Market System (NMS) is the national system for trading equities in
the United States.
• A national market system plan (or NMS plan) is a structured method of
transmitting securities transactions in real-time.
• In 2005, the rules promoting the national market system were consolidated into
SEC
View on Boundless.com
REG NMS.
• The order protection rule has generated controversies since it requires traders to
transact on a trading venue at the lowest price rather than on a venue that offers
the quickest execution or the most reliability.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-regulation-86/securities-actsamendments-of-1975-369-
Security Market Efficiency and Returns > Market Regulation
Sarbanes–Oxley Act of 2002
• As a result of SOX, top management must now individually certify the accuracy of
financial information. In addition, penalties for fraudulent financial activity are
much more severe.
• SOX increased the independence of the outside auditors who review the accuracy
of corporate financial statements, and increased the oversight role of boards of
directors.
• The bill was enacted as a reaction to a number of major corporate and accounting
scandals including those affecting Enron, Tyco International, Adelphia, Peregrine
Systems, and WorldCom.
• Opponents claim it has reduced America's international competitive edge against
SEC Building
View on Boundless.com
foreign financial service providers; Proponents say that SOX has been a
"godsend" for improving the confidence of fund managers and other investors with
regard to the veracity of corporate financial statements.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-regulation-86/sarbanes-oxleyact-of-2002-370-
Security Market Efficiency and Returns > Market Regulation
Global Research Settlement
• The Global Settlement was an enforcement agreement reached on April 28, 2003
between the SEC, NASD, NYSE, and ten of the United States's largest
investment firms to address issues of conflict of interest within their businesses.
• The central issue at hand that had been previously decided in court was the
conflict of interest between the investment banking and analysis departments of
ten of the largest investment firms in the United States.
• As part of the settlement decision published on December 20, 2002, several
regulations designed to prevent abuse stemming from pressure by investment
bankers on analysts to provide "favorable" appraisals were instantiated.
• Other than these regulatory actions, the firms involved in the settlement were also
Payments
View on Boundless.com
to pay fines to their investors, to fund investor education, and to pay for
independent third-party market research.
Free to share, print, make copies and changes. Get yours at www.boundless.com
www.boundless.com/finance/textbooks/boundless-finance-textbook/security-market-efficiency-and-returns-9/market-regulation-86/global-researchsettlement-371-
Appendix
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Key terms
• animal spirits After Keynes (citation 1936, above), the emotional and intuitive factors that drive business decisions whether to
make investment gambles.
• auction market an exchange where goods and services are offered up for bid, bids are taken, and then sold to the highest
bidder
• boards of directors A board of directors is a body of elected or appointed members who jointly oversee the activities of a
company or organization.
• clearance In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is
settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying
transaction.
• compound annual growth rate CAGR. A method for finding the average annual return of an investment.
• compounding returns Returns earned on previous returns. Akin to compounding interest.
• conflict of interest A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of
which could possibly corrupt the motivation for an act in the other.
• conflicts of interest A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of
which could possibly corrupt the motivation for an act in the other.
• dealer market an exchange where institutions are assigned to a particular security and trade out of their own account
• efficient markets hypothesis a set of theories about what information is reflected in securities trading prices
• FINRA In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a
self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD).
Though sometimes mistaken for a government agency, it is a non-governmental organization that performs financial regulation
of member brokerage firms and exchange markets. The government organization which acts as the ultimate regulator of the
securities industry, including FINRA, is the Securities and Exchange Commission.
• forwards A non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed
upon today.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• fundamental analysis An analysis of a business with the goal of financial projections in terms of income statement, financial
statements and health, management and competitive advantages, and competitors and markets.
• information bias Information bias is a type of cognitive bias, and involves distorted evaluation of information. Information bias
occurs due to people's curiosity and confusion of goals when trying to choose a course of action.
• insider trading Buying or selling securities of a publicly held company by a person who has privileged access to information
concerning the company's financial condition or plans.
• internal rate of return IRR. The rate of return on an investment which causes the net present value of all future cash flows to be
zero.
• IPOs An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are
sold to the general public, on a securities exchange, for the first time.
• Martingale model In probability theory, a martingale is a model of a fair game where knowledge of past events will never help to
predict future winnings.
• NASDAQ The National Association of Securities Dealers Automated Quotations; this is an electronic stock market.
• off-balance-sheet Off-balance sheet (OBS), or Incognito Leverage, usually means an asset or debt or financing activity not on
the company's balance sheet.
• private placements Private placement (or non-public offering) is a funding round of securities which are sold not through a
public offering, but rather through a private offering, mostly to a small number of chosen investors.
• realized return The difference between the price at which the asset is sold and the purchase price.
• return Gain or loss from an investment.
• return on investment ROI. The dollar return of the investment divided by the initial value.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• SEC The U.S. Securities and Exchange Commission (frequently abbreviated SEC) is a federal agency[2] which holds primary
responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options
exchanges, and other electronic securities markets in the United States.
• securities Synonymous with "financial instrument. " A tradable asset of any kind; either cash, evidence of an ownership interest
in an entity, or a contractual right to receive or deliver cash or another financial instrument.
• settlement Settlement of securities is a business process whereby securities or interests in securities are delivered, usually
against (in simultaneous exchange for) payment of money, to fulfill contractual obligations, such as those arising under
securities trades.
• swaps A swap is a derivative in which counterparties exchange cash flows of one party's financial instrument for those of the
other party's financial instrument.
• systemic risk The risk of collapse of an entire financial system or entire market.
• technical analysis A stock or commodity market analysis technique which examines only market action, such as prices, trading
volume, and open interest.
• underwriter An entity which markets newly issued securities
• unrealized return The difference between the market price and the purchase price. The asset has not been sold.
• volatility A quantification of the degree of uncertainty about the future price of a commodity, share, or other financial product.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
2008 Financial Crisis
The strong form of EMH is diminished by the 2008 crisis
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "2007–2012 global financial crisis." Public domain http://en.wikipedia.org/wiki/2007%25E2%2580%25932012_global_financial_crisis View on
Boundless.com
Security Market Efficiency and Returns
SEC Building
SOX was enacted as a reaction to a number of major corporate and accounting scandals.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=securities+and+exchange+commission&hl=en&sa=X&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://www.answers.
Security Market Efficiency and Returns
Secondary market
Secondary market shares should be highly liquid.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=stock+market&num=10&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://investorcentric.blogs.nuwireinvestor.
Security Market Efficiency and Returns
Securities Exchange Act of 1934
Act of 1934 governs the secondary trading of securities.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=sec&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://www.sec.gov/&tbnid=vrnFd26EwBPUWM&docid=jdKNO
Security Market Efficiency and Returns
NASDAQ
NASDAQ is a major example of a secondary quote-driven market.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "NASDAQ." GNU FDL http://en.wikipedia.org/wiki/NASDAQ View on Boundless.com
Security Market Efficiency and Returns
Cash Flow Return
The ROI is the percentage return, and is calculated by dividing the dollar return by the initial value of the investment ($1,000).
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "Rate of return." GNU FDL http://en.wikipedia.org/wiki/Rate_of_return#Arithmetic_average_rate_of_return View on Boundless.com
Security Market Efficiency and Returns
DJIA 1900-2009
The Dow Jones Industrial Average has generally increased overall since 1900, but its past performance is not a guarantee of future performance.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "File:DJIA historical graph to jan09 (log).svg - Wikipedia, the free encyclopedia." Public domain
http://en.wikipedia.org/w/index.php?title=File:DJIA_historical_graph_to_jan09_(log).svg&page=1 View on Boundless.com
Security Market Efficiency and Returns
SEC
The amendments are direct SEC to enable the establishment of a National Market System.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=sec&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://www.sec.gov/&tbnid=2yqHh2CNP5MCsM&docid=jdKNO
Security Market Efficiency and Returns
US SEC
The U.S. Securities and Exchange Commission (frequently abbreviated SEC) is a federal agency, which holds primary responsibility for enforcing the
federal securities laws and regulating the securities industry
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=Securities+and+Exchange+Commission&hl=en&biw=1275&bih=639&tbs=sur:fmc&tbm=isch&imgrefurl=http://news.doddleme.co
Security Market Efficiency and Returns
Efficient market response
The reaction of stock price to new information in efficient and inefficient markets.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Google. "Google Image Result for." CC BY
http://www.google.com/imgres?q=emh&hl=en&biw=1275&bih=596&tbs=sur:fmc&tbm=isch&imgrefurl=http://wallstreetrevelator.com/2012/10/03/myth-of-the-
Security Market Efficiency and Returns
Random Walk
Stock market cannot be predicted.
Free to share, print, make copies and changes. Get yours at www.boundless.com
http://www.xdr.com/dash/blog/index.php?entry=Whoosh!-There-goes-silver!. "Dave's Blog." CC BY http://www.xdr.com/dash/blog/index.php?entry=Whoosh!-Theregoes-silver! View on Boundless.com
Security Market Efficiency and Returns
IRS
The IRS is responsible for interpreting and enforcing tax legislation passed by Congress. The IRS taxes only realized returns, though financial reports
must also include unrealized returns on the balance sheet.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikimedia. "File:IRS.svg - Wikimedia Commons." Public domain http://commons.wikimedia.org/w/index.php?title=File:IRS.svg&page=1 View on Boundless.com
Security Market Efficiency and Returns
Internal Rate of Return
The IRR is calculated by finding the discount rate at which the NPV of the investment equals 0.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "IRR1 - Grieger." CC BY-SA http://en.wikipedia.org/wiki/File:IRR1_-_Grieger.jpg View on Boundless.com
Security Market Efficiency and Returns
Dollar Profit/(Loss)
The dollar return is the difference in value from year to year, plus the previous dollar return.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "Rate of return." GNU FDL http://en.wikipedia.org/wiki/Rate_of_return View on Boundless.com
Security Market Efficiency and Returns
Payments
The table shows the payments of each company
Free to share, print, make copies and changes. Get yours at www.boundless.com
Wikipedia. "Global Settlement." GNU FDL http://en.wikipedia.org/wiki/Global_Settlement View on Boundless.com
Security Market Efficiency and Returns
Which of the following correctly defines a type of stock market
transaction?
A) A private placement is an offering of a block of a security that has
been previously issued to the public.
B) A secondary market offering is a funding round of securities which are
not sold through a public offering.
C) A stock repurchase is the reacquisition by a company of its own stock.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following correctly defines a type of stock market
transaction?
A) A private placement is an offering of a block of a security that has
been previously issued to the public.
B) A secondary market offering is a funding round of securities which are
not sold through a public offering.
C) A stock repurchase is the reacquisition by a company of its own stock.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following correctly defines a type of market
organization?
A) A dealer market is used for securities that have no public market.
B) A broker market centers on market-makers who provide the service of
continuously bidding for securities.
C) All of these answers.
D) An auction market allows buyers and sellers to negotiate the
securities' prices between themselves.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following correctly defines a type of market
organization?
A) A dealer market is used for securities that have no public market.
B) A broker market centers on market-makers who provide the service of
continuously bidding for securities.
C) All of these answers.
D) An auction market allows buyers and sellers to negotiate the
securities' prices between themselves.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following is a characteristic of an unrealized return?
A) Unrealized gains result from the actual sale of the asset.
B) An unrealized return has no tax implications.
C) Unrealized gains involve a set transaction and are straight-forward to
calculate.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following is a characteristic of an unrealized return?
A) Unrealized gains result from the actual sale of the asset.
B) An unrealized return has no tax implications.
C) Unrealized gains involve a set transaction and are straight-forward to
calculate.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
A company buys a $1000 corporate bond that pays 10% per year.
The inflation rate is 3%. What is its dollar return on the investment
after three years?
A) $300
B) $225
C) $210
D) $331
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
A company buys a $1000 corporate bond that pays 10% per year.
The inflation rate is 3%. What is its dollar return on the investment
after three years?
A) $300
B) $225
C) $210
D) $331
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
An investor purchased stock for $10,000. He sold it three years
later for $12,500. During that time he received $3000 in dividend.
Using the compound annual growth rate (CAGR), what was his
approximate percentage return?
A) 55%
B) 7.7%
C) 25%
D) 15.7%
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
An investor purchased stock for $10,000. He sold it three years
later for $12,500. During that time he received $3000 in dividend.
Using the compound annual growth rate (CAGR), what was his
approximate percentage return?
A) 55%
B) 7.7%
C) 25%
D) 15.7%
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following statements regarding the predictive value
of historical returns is true?
A) Systemic risk, which diminishes the predictive value of historic returns,
is the risk of company failure.
B) Historical returns can be useful in predicting the general direction of a
market over a long period.
C) Macroeconomic forces can be predicted from past market
performance.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following statements regarding the predictive value
of historical returns is true?
A) Systemic risk, which diminishes the predictive value of historic returns,
is the risk of company failure.
B) Historical returns can be useful in predicting the general direction of a
market over a long period.
C) Macroeconomic forces can be predicted from past market
performance.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which method for calculating an investment's average return is
derived from the future value formula with compounding interest?
A) Average return on investment (ROI).
B) Internal rate of return (IRR).
C) Compound Annual Growth Rate (CAGR)
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which method for calculating an investment's average return is
derived from the future value formula with compounding interest?
A) Average return on investment (ROI).
B) Internal rate of return (IRR).
C) Compound Annual Growth Rate (CAGR)
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
If a market is "informationally efficient," ______.
A) one cannot consistently achieve returns in excess of average market
returns.
B) one can predict with certainty what the market will do in the future.
C) the market is "macro efficient."
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
If a market is "informationally efficient," ______.
A) one cannot consistently achieve returns in excess of average market
returns.
B) one can predict with certainty what the market will do in the future.
C) the market is "macro efficient."
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
A market's prices reflect all publicly available information and the
prices instantly change to reflect new public information. This
market reflects ___.
A) the weak-form efficient-market hypothesis.
B) the semi-strong-form efficient-market hypothesis.
C) the strong-form efficient-market hypothesis.
D) the semi-weak-form efficient-market hypothesis.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
A market's prices reflect all publicly available information and the
prices instantly change to reflect new public information. This
market reflects ___.
A) the weak-form efficient-market hypothesis.
B) the semi-strong-form efficient-market hypothesis.
C) the strong-form efficient-market hypothesis.
D) the semi-weak-form efficient-market hypothesis.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Many economists and market observers believe that the Efficient
Market Hypothesis (EMH) is limited due to characteristics of the
market participants. Which of the following personal traits do
critics believe limit the EMH's effectiveness?
A) Investors tend to overreact to both positive and negative news.
B) Market participants are overconfident that the market can regulate
itself.
C) Investors are willing to pay significant amounts for information in order
to trade on it.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Many economists and market observers believe that the Efficient
Market Hypothesis (EMH) is limited due to characteristics of the
market participants. Which of the following personal traits do
critics believe limit the EMH's effectiveness?
A) Investors tend to overreact to both positive and negative news.
B) Market participants are overconfident that the market can regulate
itself.
C) Investors are willing to pay significant amounts for information in order
to trade on it.
D) All of these answers.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following is a restriction imposed on market actors by
the Securities Act of 1933?
A) A company does not have to register if the issue in question is less
than 10% of the outstanding stock.
B) A security does not have register if the sale occurs outside the US and
the issuer does not engage in "directed selling efforts."
C) All of these answers.
D) Most securities sold in the US must be registered by filing a
registration statement with the SEC.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following is a restriction imposed on market actors by
the Securities Act of 1933?
A) A company does not have to register if the issue in question is less
than 10% of the outstanding stock.
B) A security does not have register if the sale occurs outside the US and
the issuer does not engage in "directed selling efforts."
C) All of these answers.
D) Most securities sold in the US must be registered by filing a
registration statement with the SEC.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following is an element of the Securities Exchange
Act of 1934?
A) All of these answers.
B) The Act requires that companies that have publicly traded stock
provide financials.
C) The Act authorized the formation and registration of national securities
associations.
D) The Act establishes the regulatory rules that apply to security
exchanges.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following is an element of the Securities Exchange
Act of 1934?
A) All of these answers.
B) The Act requires that companies that have publicly traded stock
provide financials.
C) The Act authorized the formation and registration of national securities
associations.
D) The Act establishes the regulatory rules that apply to security
exchanges.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which rule provides intermarket price priority for quotations that
are immediately and automatically accessible?
A) Access Rule.
B) Sub-Penny Rule.
C) Order Protection Rule.
D) Distribution and Display Rules.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which rule provides intermarket price priority for quotations that
are immediately and automatically accessible?
A) Access Rule.
B) Sub-Penny Rule.
C) Order Protection Rule.
D) Distribution and Display Rules.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following correctly pairs a standard created by
Sarbanes-Oxley with its title?
A) Title III establishes standards for external auditor independence.
B) Title II mandates that senior executives take individual responsibility
for financial reports.
C) Title VIII describes criminal penalties for manipulation of financial
records.
D) Title X increases the criminal penalties associated with white-collar
crimes and conspiracies.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following correctly pairs a standard created by
Sarbanes-Oxley with its title?
A) Title III establishes standards for external auditor independence.
B) Title II mandates that senior executives take individual responsibility
for financial reports.
C) Title VIII describes criminal penalties for manipulation of financial
records.
D) Title X increases the criminal penalties associated with white-collar
crimes and conspiracies.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Which of the following restrictions were imposed on investment
firms as part of the Global Research Settlement?
A) Banking and analysis departments must be insulated from each other.
B) The IPO quiet period was increased to 40 days.
C) All of these answers.
D) Research analysts are prohibited on going on pitches and roadshows
that promote an IPO.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
Which of the following restrictions were imposed on investment
firms as part of the Global Research Settlement?
A) Banking and analysis departments must be insulated from each other.
B) The IPO quiet period was increased to 40 days.
C) All of these answers.
D) Research analysts are prohibited on going on pitches and roadshows
that promote an IPO.
Free to share, print, make copies and changes. Get yours at www.boundless.com
Boundless - LO. "Boundless." CC BY-SA 3.0 http://www.boundless.com/
Security Market Efficiency and Returns
Attribution
• Wikipedia. "Efficient-market hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient-market_hypothesis
• Wikipedia. "Martingale model." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Martingale%20model
• Wikipedia. "Global Settlement." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Global_Settlement
• Wikipedia. "IPOs." CC BY-SA 3.0 http://en.wikipedia.org/wiki/IPOs
• Wiktionary. "conflict of interest." CC BY-SA 3.0 http://en.wiktionary.org/wiki/conflict+of+interest
• Wikipedia. "Secondary market offering." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Secondary_market_offering
• Wikipedia. "IPOs." CC BY-SA 3.0 http://en.wikipedia.org/wiki/IPOs
• Wikipedia. "Secondary market." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Secondary_market
• Wikipedia. "Stock repurchase." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Stock_repurchase
• Wikipedia. "Private placement." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Private_placement
• Wiktionary. "underwriter." CC BY-SA 3.0 http://en.wiktionary.org/wiki/underwriter
• Wikipedia. "FINRA." CC BY-SA 3.0 http://en.wikipedia.org/wiki/FINRA
• Wikipedia. "Efficient-market hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient-market_hypothesis
• Wikipedia. "Efficient-market hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient-market_hypothesis
• Wikipedia. "Efficient markets hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient_markets_hypothesis
• Wikipedia. "information bias." CC BY-SA 3.0 http://en.wikipedia.org/wiki/information%20bias
• Wikipedia. "CAGR." CC BY-SA 3.0 http://en.wikipedia.org/wiki/CAGR
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• Wikipedia. "Internal rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Internal_rate_of_return
• Wikipedia. "Rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Rate_of_return#Multiperiod_average_returns
• Wikipedia. "CAGR." CC BY-SA 3.0 http://en.wikipedia.org/wiki/CAGR
• Boundless Learning. "Boundless." CC BY-SA 3.0 http://www.boundless.com//finance/definition/compounding-returns
• Wikipedia. "Rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Rate_of_return
• Wikipedia. "Internal rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Internal_rate_of_return
• Wikipedia. "Yield (finance)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Yield_(finance)
• Boundless Learning. "Boundless." CC BY-SA 3.0 http://www.boundless.com//finance/definition/compound-annual-growth-rate
• Wikipedia. "internal rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/internal%20rate%20of%20return
• Wikipedia. "return on investment." CC BY-SA 3.0 http://en.wikipedia.org/wiki/return%20on%20investment
• Wikipedia. "CAGR." CC BY-SA 3.0 http://en.wikipedia.org/wiki/CAGR
• Autoi. CC BY-SA http://www.autoi.org/wiki/tax/how-to-report-unrealized-capital-gains_15375.html
• Wikipedia. "Capital gains tax." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Capital_gains_tax#United_States
• Wikipedia. "Gain (finance)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Gain_(finance)
• Boundless Learning. "Boundless." CC BY-SA 3.0 http://www.boundless.com//finance/definition/unrealized-return
• Boundless Learning. "Boundless." CC BY-SA 3.0 http://www.boundless.com//finance/definition/realized-return
• Wikipedia. "Rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Rate_of_return
• Wikipedia. "Rate of return." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Rate_of_return
• Wikipedia. "Profit (accounting)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Profit_(accounting)
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• Wiktionary. "return." CC BY-SA 3.0 http://en.wiktionary.org/wiki/return
• Wikipedia. "Historical simulation." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Historical_simulation
• Wikipedia. "Animal spirits (Keynes)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Animal_spirits_(Keynes)
• Wikipedia. "Systemic risk." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Systemic_risk
• Wiktionary. "animal spirits." CC BY-SA 3.0 http://en.wiktionary.org/wiki/animal+spirits
• Wiktionary. "volatility." CC BY-SA 3.0 http://en.wiktionary.org/wiki/volatility
• Wikipedia. "Great Depression." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Great_Depression
• Wikipedia. "systemic risk." CC BY-SA 3.0 http://en.wikipedia.org/wiki/systemic%20risk
• Wikipedia. "Efficient-market hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient-market_hypothesis
• Wikipedia. "Regulation NMS." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Regulation_NMS
• Wikipedia. "National market system plan." CC BY-SA 3.0 http://en.wikipedia.org/wiki/National_market_system_plan
• Wikipedia. "National Market System." CC BY-SA 3.0 http://en.wikipedia.org/wiki/National_Market_System
• Wikipedia. "Securities Industry Automation Corporation." CC BY-SA 3.0
http://en.wikipedia.org/wiki/Securities_Industry_Automation_Corporation
• Wiktionary. "settlement." CC BY-SA 3.0 http://en.wiktionary.org/wiki/settlement
• Wikipedia. "clearance." CC BY-SA 3.0 http://en.wikipedia.org/wiki/clearance
• Wikibooks. "US Corporate Law/Securities." CC BY-SA 3.0
http://en.wikibooks.org/wiki/US_Corporate_Law/Securities#Securities_Act_of_1933
• Wikipedia. "Securities Act of 1933." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Securities_Act_of_1933
• Wikipedia. "SEC." CC BY-SA 3.0 http://en.wikipedia.org/wiki/SEC
• Wikipedia. "private placements." CC BY-SA 3.0 http://en.wikipedia.org/wiki/private%20placements
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• Wikibooks. "UNIX Computing Security/Principles and policies." CC BY-SA 3.0
http://en.wikibooks.org/wiki/UNIX_Computing_Security/Principles_and_policies#Sarbanes-Oxley
• Wikipedia. "Sarbanes–Oxley Act." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Sarbanes%25E2%2580%2593Oxley_Act
• Wikipedia. "off-balance-sheet." CC BY-SA 3.0 http://en.wikipedia.org/wiki/off-balance-sheet
• Wikipedia. "conflicts of interest." CC BY-SA 3.0 http://en.wikipedia.org/wiki/conflicts%20of%20interest
• Wikipedia. "boards of directors." CC BY-SA 3.0 http://en.wikipedia.org/wiki/boards%20of%20directors
• Wikibooks. "US Corporate Law/Securities." CC BY-SA 3.0
http://en.wikibooks.org/wiki/US_Corporate_Law/Securities#Securities_Exchange_Act_of_1934
• Wikipedia. "Securities Exchange Act of 1934." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Securities_Exchange_Act_of_1934
• Wiktionary. "NASDAQ." CC BY-SA 3.0 http://en.wiktionary.org/wiki/NASDAQ
• Wikipedia. "Efficient-market hypothesis." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Efficient-market_hypothesis
• Wiktionary. "fundamental analysis." CC BY-SA 3.0 http://en.wiktionary.org/wiki/fundamental+analysis
• Wiktionary. "insider trading." CC BY-SA 3.0 http://en.wiktionary.org/wiki/insider+trading
• Wiktionary. "technical analysis." CC BY-SA 3.0 http://en.wiktionary.org/wiki/technical+analysis
• Wikipedia. "Broker-dealer." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Broker-dealer
• Wikipedia. "Auction." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Auction
• Wikipedia. "securities." CC BY-SA 3.0 http://en.wikipedia.org/wiki/securities
• Wikipedia. "forwards." CC BY-SA 3.0 http://en.wikipedia.org/wiki/forwards
• Wikipedia. "swaps." CC BY-SA 3.0 http://en.wikipedia.org/wiki/swaps
• Wikipedia. "Market maker." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Market_maker
• Wikipedia. "NYSE." CC BY-SA 3.0 http://en.wikipedia.org/wiki/NYSE#Trading
Free to share, print, make copies and changes. Get yours at www.boundless.com
Security Market Efficiency and Returns
• Wikipedia. "Securities market." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Securities_market
Free to share, print, make copies and changes. Get yours at www.boundless.com