The convexity adjustment for a callable bond with a duration of 5.5 and convexity of -38, when the interest shock is 250 basis points, is:

Tests of the EMH suggest that:
I). if technical trading rules can predict profit opportunities, they are very short lived
II). very few fundamental indicators offer forecasting power
III). despite the ability of Value Line forecasts to predict stock returns, trading profits are unlikely after adjusting the returns for transactions costs

Economic profit is

In the Ricardian Model of trade, under autarky (closed economy):

Empirical probability is: