Which of the following statements is true of rational expectations?
A) Rational expectations forecasts are always correct.
B) For a trader with rational expectations, the expectation of an asset's price equals the optimal price forecast.
C) If traders have rational expectations, any announcement by a company will have an effect on its stock price, even if the market was already aware of the facts being announced.
D) If a trader really has rational expectations, he or she was always earn a greater than normal return on his or her financial portfolio.
B
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One of the major reasons why the United States exports jet airplanes is because Boeing faces ________ opportunity cost compared with firms in other nations in the production of such aircraft
A) a higher B) an unrelated C) a lower D) a nonexistent E) an identical
Refer to the above table. Suppose the price of X increases from $10 to $12. What is the cross price elasticity of demand between X and Z?
A) +0.292 B) +7.06 C) -7.06 D) -0.292