Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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An investor receives an investment newsletter
that recommends that she invest in a stock that
has doubled the return of the S&P 500 in the
last two months. It also claims that this stock is
a "safe bet" for the future. Which of the
following statements is correct regarding this
information?
The investment newsletter contains
contrary information since the stock must
be a high risk and therefore cannot also be
a "safe bet."
This investment newsletter is most likely
correct because they most likely have
some special knowledge about the stock.
It is common for individual stocks to
double the return of the S&P 500 and still
be a "safe bet."
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Transcribed Image Text:An investor receives an investment newsletter that recommends that she invest in a stock that has doubled the return of the S&P 500 in the last two months. It also claims that this stock is a "safe bet" for the future. Which of the following statements is correct regarding this information? The investment newsletter contains contrary information since the stock must be a high risk and therefore cannot also be a "safe bet." This investment newsletter is most likely correct because they most likely have some special knowledge about the stock. It is common for individual stocks to double the return of the S&P 500 and still be a "safe bet."
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