Question
Which of the following statements is correct? (3 marks) a) Upon the public announcement of finding gold in Field X owned by Saskatoon Gold Minerals
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Which of the following statements is correct? (3 marks)
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a) Upon the public announcement of finding gold in Field X owned by Saskatoon Gold Minerals (SGM), the shares of SGM immediately soared 100% from $5 to $10 and over the next 2 days the price climbed another dollar per day to reach $13. This event suggests that the market for SGM shares is semi-strong efficient.
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b) The first statement in Part (a) suggests that the market for SGM shares is weakly efficient.
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c) The disastrous flood in Calgary few years ago is a good example of systematic risk.
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d) A portfolio that has shares from 30 different internet stocks is not a well-diversified portfolio.
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e) Investors who take risk will always be rewarded accordingly.
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