Description
Please review the Mini case named "Your 401(k) Account at East coast Yachts" available in pg.no 466 at the end of the Chapter 14: Efficient Capital Markets and Behavioral Challenges in Corporate Finance textbook and complete the 3 questions.
In your 2-3 page analysis, be sure to thoroughly answer the questions presented with a strong supporting rationale. Be sure to compose your analysis in APA format with a title page, introduction, and conclusion.
If applicable, include:
- references cited in text and in the reference section
- appropriate calculations and critical thought
- the financial statement of cash flows and the accounting statement of cash flows
- any additional documentation or information to support your analysis
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Explanation & Answer
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Outline
Task: Business
Question 1
Discusses implications from the graph on mutual investors
Question 2
Entails discussions on the graph inconsistent nature with market efficiency
Question 3
Discusses the investment decision to be taken
References
Szyszka, A. (2013). Behavioral finance and capital markets: How psychology influences
investors and corporations. Springer.
Running Head: BUSINESS
1
Discussions
Student's Name
University Affiliation
Course
Date
BUSINESS
2
Discussions
Question 1
From the graph, we observe that mutual fund investors are high performers, but the index
performance is inconsistent for a significant period. Consequently, in the first investment period,
mutual fund investors experienced a consistent decrease in performance percentages. The graph
explains the decline in performance percentages from the 1996-1998 investment periods. In
contrast, the lowest percentage performance is at fifteen percent in the 1998 investment period.
There is a significant in...