key_quiz1_372_a

key_quiz1_372_a - AFM 372 Fall 2007 Quiz #1 Version A,...

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AFM 372 Fall 2007 Quiz #1 Version A , Sept. 27 Duration: 25 m Student name: _________________ Student number: ______________ I. Multiple choice questions: Circle one answer that is the best. (2 points each) 1. The Knot Knit Corporation needs to elect 9 directors. There are 120,000 shares outstanding. Under cumulative voting, at least how many shares would you need to own to guarantee that your favorite candidate is elected? A) 60,001 B) 60,000 C) 12,001 D) 12,000 E) 13,334 2. If the efficient market hypothesis holds investors should expect: A) to earn positive abnormal return. B) to receive a fair price for their securities. C) always be able to pick stocks that will outperform the market averages. D) Both a & b. E) Both b & c. II. Short answer question (3 points. Directly copying from notes may result in lower mark. Your answer must not exceed 4 sentences or it will result in loss of mark.) Is the following hypothetical “facts” a violation of the efficient market hypothesis? If inconsistent with market efficiency, which version of efficiency would be violated? Give
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This note was uploaded on 09/29/2008 for the course FIN FINA taught by Professor Ahron during the Spring '08 term at HKU.

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key_quiz1_372_a - AFM 372 Fall 2007 Quiz #1 Version A,...

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