1
(2 points)
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The efficient market hypothesis
a)
holds that the expected return on a security equals the equilibrium return.
b)
is based on the assumption that prices of securities fully reflect all available information.
c)
both A and B.
d)
neither A nor B.
Question 2
(2 points)
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Studies of mutual fund performance indicate that mutual funds that outperformed the market in one time period
a)
usually beat the market in the next two subsequent time periods.
b)
usually beat the market in the next time period.
c)
usually do not beat the market in the next time period.
d)
usually beat the market in the next three subsequent time periods.
Question 3
(2 points)
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Ivan Boesky, the most successful of the so-called arbs in the 1980s, was able to outperform the market on a consistent
basis, indicating that
Question 4
(2 points)
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To say that stock prices follow a "random walk" is to argue that
Question 5
(2 points)
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The advantage of a "buy-and-hold strategy" is that
Question 6
(2 points)
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The small-firm effect refers to the observation that small firms' stocks
a)
have earned abnormally low returns given their greater risk.
b)
have earned abnormally high returns even taking into account their greater risk.
c)
follow a random walk but large firms' stocks do not.
d)
sell for lower prices than do large firms' stocks.
Question 7
(2 points)
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An important lesson from the Black Monday Crash of 1987 and the tech crash of 2000 is that
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- Spring '08
- DUONG
- Federal Reserve Banks
-
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