Exam 11: The Efficient Market Hypothesis

The weather report says that a devastating and unexpected freeze is expected to hit Florida tonight during the peak of the citrus harvest.In an efficient market, one would expect the price of Florida Orange's stock to

(Multiple Choice)

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Question 21

The main difference between the three forms of market efficiency is that

(Multiple Choice)

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Question 22

If you believe in the ________ form of the EMH, you believe that stock prices reflect all relevant information, including historical stock prices and current public information about the firm, but not information that is available only to insiders.

(Multiple Choice)

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Question 23

The abnormal return due to an event is estimated as the difference between

(Multiple Choice)

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Question 24

Which of the following are used by fundamental analysts to determine proper stock prices? I) Trendlines II. Earnings III. Dividend prospects IV. Expectations of future interest rates V. Resistance levels

(Multiple Choice)

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Question 25

Womack focuses on changes in analysts' recommendations and finds that

(Multiple Choice)

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Question 26

LJP Corporation just announced yesterday that it would undertake an international joint venture.You observe that LJP had an abnormal return of 3% yesterday.This suggests that

(Multiple Choice)

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Question 27

Google has a beta of 1.0.The annualized market return yesterday was 11%, and the risk-free rate is currently 5%.You observe that Google had an annualized return yesterday of 14%.Assuming that markets are efficient, this suggests that

(Multiple Choice)

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Question 28

When Maurice Kendall first examined stock price patterns in 1953, he found that

(Multiple Choice)

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Question 29

If you believe in the _________ form of the EMH, you believe that stock prices reflect all available information, including information that is available only to insiders.

(Multiple Choice)

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Question 30

If you believe in the _______ form of the EMH, you believe that stock prices only reflect all information that can be derived by examining market trading data, such as the history of past stock prices, trading volume or short interest.

(Multiple Choice)

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Question 31

An event study describes a technique of empirical financial research that

(Multiple Choice)

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Question 32

Patell and Wolfson show that most of the stock price response to corporate dividend or earnings announcements occurs

(Multiple Choice)

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Question 33

A market decline of 23% on a day when there is no significant macroeconomic event consistent with the EMH because __.

(Multiple Choice)

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Question 34

One of the most commonly heard components of technical analysis is the notion of a resistance level, which refers to

(Multiple Choice)

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Question 35

Music Doctors just announced yesterday that its first quarter sales were 35% higher than last year's first quarter.You observe that Music Doctors had an abnormal return of -2% yesterday.This suggests that

(Multiple Choice)

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Question 36

_________ below which it is difficult for the market to fall.

(Multiple Choice)

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Question 37

When Maurice Kendall examined the patterns of stock returns in 1953, he concluded that the stock market was __.Now, these random price movements are believed to be _.

(Multiple Choice)

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Question 38

Matthews Corporation has a beta of 1.2.The annualized market return yesterday was 13%, and the risk-free rate is currently 5%.You observe that Matthews had an annualized return yesterday of 17%.Assuming that markets are efficient, this suggests that

(Multiple Choice)

4.9/5

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Question 39

Which of the following are used by technical analysts to determine proper stock prices? I) Trendlines II. Earnings III. Dividend prospects IV. Expectations of future interest rates V. Resistance levels

(Multiple Choice)

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Question 40

Showing 21 - 40 of 42

Exam 11: The Efficient Market Hypothesis

The weather report says that a devastating and unexpected freeze is expected to hit Florida tonight during the peak of the citrus harvest.In an efficient market, one would expect the price of Florida Orange's stock to

The main difference between the three forms of market efficiency is that

If you believe in the ________ form of the EMH, you believe that stock prices reflect all relevant information, including historical stock prices and current public information about the firm, but not information that is available only to insiders.

The abnormal return due to an event is estimated as the difference between

Which of the following are used by fundamental analysts to determine proper stock prices? I) Trendlines II. Earnings III. Dividend prospects IV. Expectations of future interest rates V. Resistance levels

Womack focuses on changes in analysts' recommendations and finds that

LJP Corporation just announced yesterday that it would undertake an international joint venture.You observe that LJP had an abnormal return of 3% yesterday.This suggests that

Google has a beta of 1.0.The annualized market return yesterday was 11%, and the risk-free rate is currently 5%.You observe that Google had an annualized return yesterday of 14%.Assuming that markets are efficient, this suggests that

When Maurice Kendall first examined stock price patterns in 1953, he found that

If you believe in the _________ form of the EMH, you believe that stock prices reflect all available information, including information that is available only to insiders.

If you believe in the _______ form of the EMH, you believe that stock prices only reflect all information that can be derived by examining market trading data, such as the history of past stock prices, trading volume or short interest.

An event study describes a technique of empirical financial research that

Patell and Wolfson show that most of the stock price response to corporate dividend or earnings announcements occurs

A market decline of 23% on a day when there is no significant macroeconomic event ______ consistent with the EMH because ________.

One of the most commonly heard components of technical analysis is the notion of a resistance level, which refers to

Music Doctors just announced yesterday that its first quarter sales were 35% higher than last year's first quarter.You observe that Music Doctors had an abnormal return of -2% yesterday.This suggests that

_________ below which it is difficult for the market to fall.

When Maurice Kendall examined the patterns of stock returns in 1953, he concluded that the stock market was __________.Now, these random price movements are believed to be _________.

Matthews Corporation has a beta of 1.2.The annualized market return yesterday was 13%, and the risk-free rate is currently 5%.You observe that Matthews had an annualized return yesterday of 17%.Assuming that markets are efficient, this suggests that

Which of the following are used by technical analysts to determine proper stock prices? I) Trendlines II. Earnings III. Dividend prospects IV. Expectations of future interest rates V. Resistance levels

The Investment Environment

Financial Markets, Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

Behavioural Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

A market decline of 23% on a day when there is no significant macroeconomic event consistent with the EMH because __.

When Maurice Kendall examined the patterns of stock returns in 1953, he concluded that the stock market was __.Now, these random price movements are believed to be _.