IMPORTANT NOTE: The questions must be addressed in its full context. These questions are an opportunity to go outside the box to demonstrate your analytical, integrative, problem- solving and critical thinking skills using the knowledge acquired in your readings. As a result, it is very important to pay close attention to the questions and be able to conduct your discussions in the context of your question. – Please keep this in mind when you complete this assignment.
You must expand your ideas further. Analysis must be deep and very instructive.
ANSWER THE FOLLOWING QUESTIONS. Each question should be answered in at least 300 words. Quality of content and use of course and outside-of-course resources to support your position or analysis. The answers should not be in the form of essay, just straight to the point- Work must be original and cite your sources.
Please be sure to answer the question completely but specifically in well-written complete sentences.
Use the attached lecture to help you answer these questions, and conduct your own research
- What are the three forces which simultaneously affect stock prices as described by the Dow theory?
- Identify three innovations in the bond market and describe each.
- Under the expectations hypothesis, if the yield curve is upward sloping, the market must expect an increase in short-term interest rates. Is this true or false and why?
- Under the expectations hypothesis, if the yield curve is downward sloping, the market must expect an increase in short-term interest rates. Is this true or false and why?
- What are the strong points of the behavioral critique of the efficient market hypothesis? What are some problems with the critique?
- What is the option embedded in a callable bond? A puttable bond?