Exam 2 - SAMPLE QUESTIONS

Fundamentalanalysisshowsthatstockincedarvalleyfurnitur

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Unformatted text preview: savings are allocated to a class of safe assets. b. the person knows with certainty that his or her return will be 3 percent. c. the standard deviation of the person’s portfolio is zero. d. All of the above are correct. ____ 13. In general, as a person includes fewer stocks and more bonds in his portfolio, a. both risk and expected return rise. b. risk rises but expected return falls. c. risk falls, but expected return rises. d. both risk and expected return fall. ____ 14. Fundamental analysis shows that stock in Cedar Valley Furniture Corporation has a price that exceeds its present value. a. This stock is overvalued; you should consider adding it to your portfolio. b. This stock is overvalued; you shouldn't consider adding it to your portfolio. c. This stock is undervalued; you should consider adding it to your portfolio. d. This stock is undervalued; you shouldn't consider adding it to your portfolio. 3 Name: ________________________ ID: A ____ 15. Which of the following is correct? a. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy. b. The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and a complex economy can achieve zero unemployment. c. The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and a complex economy can achieve zero unemployment. d. The amount of unemployment that a countr...
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This note was uploaded on 06/12/2013 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue.

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