Chapter 2 & 6 - 1. (Points: 1) E Which of the...

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Sheet1 Page 1 (Points: 1) E Which of the following statements is CORRECT? a. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birth d b. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a prim c. The NYSE does not exist as a physical location d. While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas comm e e. Capital market instruments include both long-term debt and common stocks. Save Answer (Points: 1) Not A Which of the following statements is CORRECT? a. It is possible that the price set in an IPO is so high that investors will refuse to buy the number of shares that the company w b. In a "Dutch auction," investors who want to buy shares in an IPO submit bids indicating how many shares they want to buy a c. IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the clos e d. It is possible that the price set in an IPO is so low that investors will want to buy more shares than the company wants to se e. The term "IPO" stands for introductory price offered, and it is the price at which shares of a new company are offered to the p Save Answer (Points: 1) D If the stock market is semistrong-form efficient, which of the following statements is CORRECT? a. In equilibrium, stocks and bonds should have the same expected returns. b. High-risk stocks should have the same expected return as low-risk stocks. c. If the stock market has been performing strongly over the past several months, stock prices are more likely to decline than i n d. Investors can outperform the market if they have access to information that has not yet been publicly revealed. e. All stocks should have the same expected returns. However, they may end up with different realized returns. Save Answer (Points: 1) E If the Federal Reserve sells $50 billion of short-term U.S. Treasury securities to the public, other things held constant, what w o a. There is no reason to expect a change in either prices or interest rates. b. Prices and interest rates will both rise.
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.

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Chapter 2 & 6 - 1. (Points: 1) E Which of the...

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