Finance 320

Topics: Fundamental analysis, Stock market, Active management Pages: 24 (2977 words) Published: October 16, 2011
CHAPTER 11


















































































































































Question 1
0 out of 1 points

Which of the following is not a method employed by followers of technical analysis? Relative strength analysis
Question 2
1 out of 1 points

The broadest information set is included in the
strong form efficiency argument
Question 3
1 out of 1 points

A day trade with an average stock holding period of under 8 minutes might be most closely associated with which trading philosophy? Technical analysis
Question 4
0 out of 1 points

Studies show that the bid-ask spread for the least liquid stocks may be as high as ______. 9%
Question 5
1 out of 1 points

Most tests of semi-strong efficiency are _________.
joint tests of market efficiency and the risk adjustment measure Question 6
1 out of 1 points

The semi-strong form of the EMH states that ________ must be reflected in the current stock price. all publicly available information
Question 7
0 out of 1 points

Fama and French have suggested that many market anomalies can be explained as manifestations of ____________. high trading costs
Question 8
1 out of 1 points

In an efficient market and for an investor that believes in a passive approach to investing, what is the primary duty of a portfolio manager? Diversification
Question 1
1 out of 1 points

Value stocks usually exhibit ___ price-to-book ratios and ___ price-to-earnings ratios. low, low
Question 2
1 out of 1 points

Most of the stock price response to a corporate earnings or dividend announcement occurs within ________________. about 10 minutes
Question 3
0 out of 1 points

Which of the following would violate the efficient market hypothesis? High earnings growth stocks fail to generate higher returns for investors than low earnings growth stocks. Question 4
0 out of 1 points

You believe that you can earn 2% more on your portfolio if you engage in full time stock research. However, the additional trading costs and tax liability from active management will cost you about 0.5%. You have a $800,000 stock portfolio. What is the most you can afford to spend on your research? $4,000

Question 5
1 out of 1 points

Tests of mutual fund performance indicate that funds with ______________ tend to have poorer performance. higher expense and turnover ratios
Question 6
0 out of 1 points

Choosing stocks by searching for predictable patterns in stock prices is called ________. fundamental analysis
Question 7
1 out of 1 points

A day trade with an average stock holding period of under 8 minutes might be most closely associated with which trading philosophy? Technical analysis
Question 8
1 out of 1 points

Proponents of the EMH think technical analysts __________.
are wasting their time
Question 1
0 out of 1 points

Which of the following is not a concept related to explaining abnormal excess stock returns? P/E effect
Question 2
1 out of 1 points

Insiders are able to profitably trade and earn abnormal returns prior to the announcement of positive news. This is a violation of which form of efficiency? Strong form efficiency
Question 3
0 out of 1 points

When testing mutual fund performance over time one must be careful of ___________, which means that a certain percentage of poorer performing funds fail over time which makes the performance of remaining funds seem more consistent over time. magnitude bias...
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