Exam 11: The Efficient Market Hypothesis

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 61

According to proponents of the efficient market hypothesis,the best strategy for a small investor with a portfolio worth $40,000 is probably to

(Multiple Choice)

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Question 62

Your professor finds a stock-trading rule that generates excess risk-adjusted returns.Instead of publishing the results,she keeps the trading rule to herself.This is most closely associated with ________.

(Multiple Choice)

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Question 63

Music Doctors has a beta of 2.25.The annualized market return yesterday was 12%,and the risk-free rate is currently 4%.You observe that Music Doctors had an annualized return yesterday of 15%.Assuming that markets are efficient,this suggests that

(Multiple Choice)

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Question 64

In an efficient market,__________.

(Multiple Choice)

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Question 65

Basu (1977,1983)found that firms with low P/E ratios

(Multiple Choice)

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Question 66

A finding that _________ would provide evidence against the semistrong form of the efficient market theory.

(Multiple Choice)

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Question 67

Researchers have found that most of the small firm effect occurs

(Multiple Choice)

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Question 68

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

(Multiple Choice)

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Question 69

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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

According to proponents of the efficient market hypothesis,the best strategy for a small investor with a portfolio worth $40,000 is probably to

Your professor finds a stock-trading rule that generates excess risk-adjusted returns.Instead of publishing the results,she keeps the trading rule to herself.This is most closely associated with ________.

Music Doctors has a beta of 2.25.The annualized market return yesterday was 12%,and the risk-free rate is currently 4%.You observe that Music Doctors had an annualized return yesterday of 15%.Assuming that markets are efficient,this suggests that

In an efficient market,__________.

Basu (1977,1983)found that firms with low P/E ratios

A finding that _________ would provide evidence against the semistrong form of the efficient market theory.

Researchers have found that most of the small firm effect occurs

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