Exam 11: The Efficient Market Hypothesis

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QQAG just announced yesterday that its fourth quarter earnings will be 35% higher than last year's fourth quarter.You observe that QQAG had an abnormal return of -1.7% yesterday.This suggests that

(Multiple Choice)

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Question 21

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 22

A support level is the price range at which a technical analyst would expect the

(Multiple Choice)

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Question 23

The difference between a random walk and a submartingale is the expected price change in a random walk is and the expected price change for a submartingale is .

(Multiple Choice)

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Question 24

At freshman orientation,1,500 students are asked to flip a coin 20 times.One student is crowned the winner (tossed 20 heads).This is most closely associated with ________.

(Multiple Choice)

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Question 25

A hybrid strategy is one where the investor

(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

Jaffe (1974)found that stock prices _________ after insiders intensively sold shares.

(Multiple Choice)

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Question 28

_________ above which it is difficult for the market to rise.

(Multiple Choice)

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Question 29

Cumulative abnormal returns (CAR)

(Multiple Choice)

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Question 30

The Food and Drug Administration (FDA)just announced yesterday that they would approve a new cancer-fighting drug from King.You observe that King had an abnormal return of 0% yesterday.This suggests that

(Multiple Choice)

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Question 31

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 32

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 33

Jaffe (1974)found that stock prices _________ after insiders intensively bought shares.

(Multiple Choice)

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Question 34

If you believe in the reversal effect,you should

(Multiple Choice)

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Question 35

The likelihood of an investment newsletter's successfully predicting the direction of the market for three consecutive years by chance should be

(Multiple Choice)

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Question 36

If you believe in the reversal effect,you should

(Multiple Choice)

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Question 37

Fama and French (1992)found that the stocks of firms within the highest decile of book-to-market ratios had average monthly returns of _ while the stocks of firms within the lowest decile of book-to-market ratios had average monthly returns of__.

(Multiple Choice)

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Question 38

The stock market follows a __________.

(Multiple Choice)

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Question 39

Arbel (1985)found that.

(Multiple Choice)

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Question 40

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Exam 11: The Efficient Market Hypothesis

QQAG just announced yesterday that its fourth quarter earnings will be 35% higher than last year's fourth quarter.You observe that QQAG had an abnormal return of -1.7% yesterday.This suggests 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.

A support level is the price range at which a technical analyst would expect the

The difference between a random walk and a submartingale is the expected price change in a random walk is ______ and the expected price change for a submartingale is ______.

At freshman orientation,1,500 students are asked to flip a coin 20 times.One student is crowned the winner (tossed 20 heads).This is most closely associated with ________.

A hybrid strategy is one where the investor

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

Jaffe (1974)found that stock prices _________ after insiders intensively sold shares.

_________ above which it is difficult for the market to rise.

Cumulative abnormal returns (CAR)

The Food and Drug Administration (FDA)just announced yesterday that they would approve a new cancer-fighting drug from King.You observe that King had an abnormal return of 0% yesterday.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

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

Jaffe (1974)found that stock prices _________ after insiders intensively bought shares.

If you believe in the reversal effect,you should

The likelihood of an investment newsletter's successfully predicting the direction of the market for three consecutive years by chance should be

If you believe in the reversal effect,you should

Fama and French (1992)found that the stocks of firms within the highest decile of book-to-market ratios had average monthly returns of _______ while the stocks of firms within the lowest decile of book-to-market ratios had average monthly returns of________.

The stock market follows a __________.

Arbel (1985)found that.

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Introduction to Risk,return,and the Historical Record

Risk Aversion and 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

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

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The difference between a random walk and a submartingale is the expected price change in a random walk is and the expected price change for a submartingale is .

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

Fama and French (1992)found that the stocks of firms within the highest decile of book-to-market ratios had average monthly returns of _ while the stocks of firms within the lowest decile of book-to-market ratios had average monthly returns of__.