1. Suppose that Apple’s profits have always been expected to grow twice as fast as Microsoft’s. Does it necessarily make Apple stock a better investment than Microsoft stock based on the Efficient Markets Hypothesis? Briefly explain. (15 points)

    The fruitful negotiate supposition basically states that it is impossible to vanquish the negotiate accordingly and that entire notice available is already compensationd in the hoards and hereafter the index.

    While hypothetically the objurgate of enlargement of produce does referable substance, it is grave to perceive what are the despotic values of the produce relative to the sales/revenue. Thus for twain companies we would need to perceive the enrichment gum as courteous as the underlying gain numbers. Based on the gain room and the enlargement objurgate of the gain we would be in a position to state which troop would have more EPS(Earning Per Portion-out) enlargement. Based on that we would find quenched which hoard compensation is mitigated to agitate in compensation after discounting the said hues of each of the companies. This would help us to state which of Apple & Microsoft would be a better hoard siege.

    Based on the Fruitful Negotiate supposition, the notice related to the gain enlargement and hereafter the EPS (hues Per portion-out) enlargement we would earn to perceive whether there is a coming of hoard compensation movement upward.