Fall08-Solution-Exam2 - BUS 172A Investment Analysis Fall...

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BUS 172A – Investment Analysis Fall 2008 Exam 2 Last Name: __________________________First Name: _____________________ Class Time: _________________________ Instructions: There are 13 questions . Questions 1–5 are multiple-choice questions. Questions 6–12 are problems for which computations are necessary. Finally, question 13 is an open question. For each question you need to report the correct final answer in the space provided . For questions 6–12, in addition to reporting the final answer, you must also report the complete and correct solution with clear computations. When reporting the solutions to the questions 6-12 you must label all the amounts you use in the computations. Your computations and solutions to the questions 6-12 must be clear and easy to understand. For question 13 you must report a concise and clearly understandable answer. Grading: Each multiple-choice question is worth 5 points. No partial credit is granted for questions 1-5 . For the problems 6-12 you can only receive the maximum points allowed if you record the correct final answer along with the complete and correct solution for the problem. If you report the correct final answer, but you do not provide a complete and consistent solution for the problems, you will not receive any points. Partial credit is granted for questions 6–13 . 1
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Section I – Multiple Choice Questions: 5 points each question 1. Which of the following is a possible explanation of the January effect? I. Institutional window dressing II. Bonus demand III. Tax-loss selling a. I only. b. I and II only. c. I and III only. d. I, II, and III. e. None of the above. ANSWER: ________ 2. Which of the following would provide evidence against the semi-strong form of the efficient market theory? a. About 50% of pension funds outperform the market in any given year. b. After a manager exercises his/her stock options, the stock experiences no excess returns. c. All investors have learned to exploit signals about future performance. d. Trend analysis is worthless in determining stock prices. e. Low Price-to-Book Value (P/B) stocks tend to have positive abnormal returns over the long run. ANSWER: ________
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This note was uploaded on 09/08/2010 for the course BUS 172A at San Jose State University .

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Fall08-Solution-Exam2 - BUS 172A Investment Analysis Fall...

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