Lecture 12 Capital Market Research CMR questions and correct answers GRADED A+

LECTURE 12 CAPITAL
MARKET RESEARCH CMR
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
CMR - ANS-Explores the role of accounting and other financial information in equity
markets and explores how groups of individuals react to accounting disclosures. it
involved examining statistical relations between financial information and share prices


Characteristics of CMR - ANS-- large data sets as it analyses everyone participating on a
certain stock market at a specific time
- positive theory as you are predicting and explaining reactions to accounting
information
- relies on the assumption that equity markets are efficient in accordance with EMH


CMR versus behavioural research - ANS-CMR assesses the aggregate effect of financial
reporting on investors, considers only investors.


Behavioural research analyses individual responses to financial reporting e.g. by case
study, interviews


weak-form efficient market - ANS-market in which prices reflect all past information,
such as information in last year's annual report, previous earnings announcements,
and other past news