If traders in a market have rational expectations, then
A) the price of an asset equals its fundamental value.
B) prices of riskier assets are higher than prices of less risky assets.
C) past prices of assets do not affect market participants' expectations of future asset prices.
D) they make use of less information than they would if they had adaptive expectations.
Correct Answer:
Verified
Q3: Rational expectations involve the assumption that
A)market participants
Q4: If the dollar is expected to depreciate
Q5: If market participants rely only past stock
Q6: The gap between the yield on a
Q7: When market participants use all available information
A)market
Q9: Which of the following statements is true
Q10: When market participants have rational expectations,
A)they use
Q11: Which of the following is NOT a
Q12: George is trying to forecast the future
Q13: When market participants have rational expectations,
A)the information
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