 |
1 | |
Hanover, Inc., stock returned 14 percent while other stocks with the same level of risk returned 12 percent. This means that Hanover stock has a 2 percent excess return. |
| | A) | True |
| | B) | False |
|
|
2 | |
The random walk theory supports the hypothesis that stock prices have a discernable pattern over time. |
| | A) | True |
| | B) | False |
|
|
3 | |
If you decide to purchase shares of a stock based on your analysis of information you have read both on the internet and in the newspaper, then you are an informed trader. |
| | A) | True |
| | B) | False |
|
|
4 | |
If every investor in the market was irrational, the market: |
| | A) | would have some highly overvalued and some highly undervalued securities. |
| | B) | would tend to be overvalued as a whole. |
| | C) | would tend to be undervalued as a whole. |
| | D) | fluctuations would tend to be severe. |
| | E) | could still be efficient. |
|
|
5 | |
Following are the daily returns for Carlyle stock and for the overall market. What is the cumulative abnormal return (CAR) on Carlyle stock for this week? Assume the stock has an expected return equal to that of the market.| Day | Market Return % | Carlyle Return % | | Mon | 1.1% | 1.2% | | Tue | 0.3 | 0.3 | | Wed | 0.8 | 0.9 | | Thu | 0.1 | 0.3 | | Fri | -1.9 | -2.1 |
|
| | A) | -0.2% |
| | B) | -0.1% |
| | C) | 0.0% |
| | D) | 0.1% |
| | E) | 0.2% |
|
|
6 | |
The inability to determine what information was underlying the market behavior on a particular date is known as the _____ problem. |
| | A) | market data |
| | B) | "inside" information |
| | C) | relevant information |
| | D) | data snooping |
| | E) | dumb luck |
|
|
7 | |
Small stocks tend to earn higher returns during the: |
| | A) | first few days of a new year. |
| | B) | last week of January. |
| | C) | week including April 15th. |
| | D) | last week of September. |
| | E) | first few days of December. |
|
|
8 | |
When market prices are higher than what can be supported by rational analysis, a market _____ occurs. |
| | A) | crash |
| | B) | recession |
| | C) | bubble |
| | D) | explosion |
| | E) | implosion |
|
|
9 | |
Which of the following have been offered as possible causes or contributors to the market crash known as "Black Monday"?- unsupportable high prices
- program trading
- antitakeover legislation discussions
- economic information
|
| | A) | I and II only |
| | B) | III and IV only |
| | C) | II and III only |
| | D) | II, III, and IV only |
| | E) | I, II, III, and IV |
|
|
10 | |
As a result of the "dot.com" crash, the Amex Internet Index lost about _____ percent of its value. |
| | A) | 50 |
| | B) | 60 |
| | C) | 70 |
| | D) | 80 |
| | E) | 90 |
|