like playing bridge with someone who has been told it doesn’t do any good to look at the cards”. Discuss. Warren Buffet‚ New York Times Magazine. AUTHOR: CHARLES EKWE RUO “In an efficient market‚ security (example shares) prices rationally reflect available information” (Arnold 2005‚ p.684). The efficient market hypothesis (EMH) refers to share price movement with respect to available information and thus no trader will be presented with an opportunity of making supernormal profits (except
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The argument from design is an analogy and works by comparing the universe to an object. An example of the comparison would be to say the world resembles a car. All cars have creators‚ therefore‚ the world has to have a creator‚ and that must be God. The argument concludes by saying by observing the world we can gather evidence that the intelligence of a human that creates a car‚ bike or some other item resembles‚ in a less perfect form‚ God. However‚ Hume thinks this argument fails. Hume does not
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As Is or Otherwise? Although both G. W. Leibniz and Thomas Aquinas were theists‚ they had significant differences in their understanding of God’s free ability to do other than what he chooses to do. Leibniz allows that God could have done otherwise‚ but only in a logical sense of possibility‚ because God‚ by his goodness and wisdom‚ would always choose the best possible world. Aquinas wisely disagrees with this and asserts that God‚ in order to be a first principle‚ must not have his actions determined
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Creating efficient frontiers using excel. Suppose we have 3 risky assets whose net return has the mean vector and variancecovariance matrix given below: Asset Mean VarianceCovariance Matrix 1 2 3 0.06 0.12 0.03 1 0.3 0.3 0.3 1 0.3 0.3 0.3 1 Weights Ones Mean Portfolio Return 1 1 1 0.176666122 Portfolio Portfolio Portfolio Variance STD Constraint 2.42961 1.558721 1 0.079372 1.603166 -0.68254 To model the portfolio choice problem‚ I begin by highlighting the mean vector and giving
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Aquinas: So what you’re saying is that good or bad fortune affects our happiness? A- Yes. In order to have a good fortune‚ one needs external or material goods‚ a position in society‚ and even good looks. However‚ if one is living life to the full according to rational nature‚ they are bound to find happiness regardless. This is why happiness is more influenced by behavior and habit of virtue than by luck‚ good and
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Aquinas proposed three different models of how humans can understand things: univocal‚ equivocal‚ or analogical. Aquinas dismisses both univocal and equivocal. A univocal approach will put God and humans on the same plane‚ with the idea that the way God loves and the way a human loves are identical. In sharp contrast
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Instructions for Efficient-Frontier Construction a. Estimation The goal is to obtain the raw ingredients – expected returns‚ standard deviations and correlations. Historical data are used for this purpose. As a rule of thumb‚ five years of daily data are probably right (one year should be the absolute minimum). Keep in mind the following: 1) make sure to use the adjusted close prices to calculate returns (so that you won’t have large‚ spurious negative returns due to dividend payments or splits)
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The definition of the efficient frontier says that “the efficient frontier represents the set of portfolios that has the maximum rate of return for every given level of risk‚ or the minimum risk for every level of return.” I plotted standard deviation on x axes and Returns on y axes to interpret efficient frontier. Exhibits also include these and the graphs you asked for as graph2: In our study‚ we concentrated on the optimal portfolios‚ the one which has the lowest volatility or risk‚ for given
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An efficient market is a market in which prices can always fully reflect available information. According to Andrei Shleifer‚ Market efficiency is theoretically based on three conditions‚ which are investor rationality‚ independent deviations from rationality and unlimited arbitrage. If three conditions cannot be satisfied‚ the market might be not efficient. Thus‚ investors’ rational behavior leads to stock market efficiency. For instance‚ when a company releases new information‚ for all investors
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Efficient Cash Management Upon preparation of cash budgets after forecasting the receipts and payments‚ the management will have knowledge about the cash position of the firm. After knowing the cash position‚ the management should work out the basic strategies to be employed to manage its cash. The strategies of cash management are essentially related to the cash turnover process‚ that is‚ the cash cycle together with the cash turnover. The cash cycle is the amount of time cash is tied up between
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