Introduction to Corporate Finance

Ross et al.: Fundamentals

of Corporate Finance, Sixth

Edition, Alternate Edition

V. Risk and Return 12. Some Lessons from

Capital Market History

(^442) © The McGraw−Hill
Companies, 2002
12.3. Market Efficiency What are the best performing stocks over the past year?
Go to finance.yahoo.comand select the “Stock Screener” link. You will see a
“Performance” category and a pull-down menu labeled “1 Yr Stock Perf.” Select
“Up more than 200%” and “Find Stocks.” How many stocks have increased
more than 200% over the past year? Now go back and select “Down more than
90%.” How many stocks have dropped more than 90% in value over the past
year? What does this say about market efficiency?
Spreadsheet Templates12–7, 12–8, 12–13
CHAPTER 12 Some Lessons from Capital Market History 413
A B C D
E F G H
321
654
987
112110
1143
Using a spreadsheet for time value o
If wein ves $t 25 ,0 (^00) at (^12) percent, how lf monogn uey calculations
for the unknown of periods, so we use the formanl Nil twPe hERa (rave $te, p 50 ,m (^00) , pt (^0)? Wvfve (^) need to solve
)
RaFtePuret (rausreente V)t Valuaelu (fve ()pv)
ThPe erfoiods:
rmal entered in cell B 10 is = NPER: not
has (^) a negative sign on it. Also notice that rate isic ee thnteart ped amst i sd zeciemro aal, nnod tt ahat pv
percentage.
$$ 5200 ,0.1^5 ,0 02000
6 .1 (^16255)