Question 1

The study by Fama and French (1992)showed that,on average,value firms outperformed growth firms by 13% p.a.

Accepted Answer

A) True 
 B)False  True

Question 2

In reference to moving averages,another traditional technique used in charting:

Accepted Answer

A)  Will help determine if the company is slightly overbought but no reversal is expected 
B)  will help determine if the company looks overbought and the outlook is bearish 
C)  it is possible to use multiple moving averages in combination 
D)  technicians use a moving average to indicate short term trends 
A)  Will help determine if the company is slightly overbought but no reversal is expected 
B)  will help determine if the company looks overbought and the outlook is bearish 
C)  it is possible to use multiple moving averages in combination 
D)  technicians use a moving average to indicate short term trends C

Question 3

A blue-chip share generally exhibits __________ over time.

Accepted Answer

A)  little growth 
B)  strong growth 
C)  low volatility 
D)  strong volatility 
A)  little growth 
B)  strong growth 
C)  low volatility 
D)  strong volatility C

Question 4

Fundamental analysis focus more on past price movements of a firm's stock than on the underlying determinants of its future profitability.

Accepted Answer

A) True 
 B)False

Question 5

The distinguishing feature between blue-chip and green-chip shares is:

Accepted Answer

A)  the growth rate of the underlying company 
B)  the size of the underlying company 
C)  the book value of the underlying company
D all of these choices 
A)  the growth rate of the underlying company 
B)  the size of the underlying company 
C)  the book value of the underlying company
D all of these choices

Question 6

A ____________ of blue-chip shares is that because they are _________ so closely to the market,a portfolio consisting of almost exclusively blue-chip shares will simply perform in _________ with the market.

Accepted Answer

A)  component, linked, reversal 
B)  disadvantage, aligned, accordance 
C)  advantage, tracking conflict 
D)  component, staying time 
A)  component, linked, reversal 
B)  disadvantage, aligned, accordance 
C)  advantage, tracking conflict 
D)  component, staying time

Question 7

Shares that are classified as __________ have a high book-to-market ratio.

Accepted Answer

A)  blue-chip shares 
B)  green-chip shares 
C)  growth shares 
D)  value shares 
A)  blue-chip shares 
B)  green-chip shares 
C)  growth shares 
D)  value shares

Question 8

Firms that have shares with a relatively high value of historical assets in place,are typically growth shares.

Accepted Answer

A) True 
 B)False

Question 9

Other things being equal,a value firm compared with a growth firm will have:

Accepted Answer

A)  higher cost of capital 
B)  lower growth rate on assets 
C)  lower profitability 
D)  all of these choices 
A)  higher cost of capital 
B)  lower growth rate on assets 
C)  lower profitability 
D)  all of these choices

Question 10

The most significant determinant of a share price is a company's:

Accepted Answer

A)  beta 
B)  net profit 
C)  capacity to pay future dividends 
D)  book-to-market ratio 
A)  beta 
B)  net profit 
C)  capacity to pay future dividends 
D)  book-to-market ratio

Question 11

A growth firm has a relatively high book-to-market ratio.

Accepted Answer

A) True 
 B)False

Question 12

Assuming a cost of equity capital of 18.5%,a growth rate of 9.5% and a rate of return on the (net)assets in place of 12%,what is the book-to-market ratio of this firm?

Accepted Answer

A)  $ -0.607 $ 
B)  $ 0.750 $ 
C)  $ -60.67 $
D $ -7732 $ 
A)  $ -0.607 $ 
B)  $ 0.750 $ 
C)  $ -60.67 $
D $ -7732 $

Question 13

The various terms that are assigned to more complex charting that involves the plotting of daily high-low closing prices and volume across time are:

Accepted Answer

A)  ascending and descending triangles and $ \mathrm{w} $-bottom 
B)  head and shoulders and rising and falling wedges 
C)  rising and falling pennants and triple top 
D)  all of these choices 
A)  ascending and descending triangles and $ \mathrm{w} $-bottom 
B)  head and shoulders and rising and falling wedges 
C)  rising and falling pennants and triple top 
D)  all of these choices

Question 14

The closer the specific attributes of companies,the greater the difference between the value of their shares will occur.

Accepted Answer

A) True 
 B)False

Question 15

A resistant level is the range of prices at which the technician expects an __________ in the supply of shares such that any price will be ____________.

Accepted Answer

A)  increase, increased 
B)  expansion, justified 
C)  decrease, decreased 
D)  increase, reversed 
A)  increase, increased 
B)  expansion, justified 
C)  decrease, decreased 
D)  increase, reversed

Question 16

According to technical analysis,a series of price increases supported by heavy volume,interspersed with price falls on light volume,may be indicative of a bear market.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT one of Reilly and Norton's (1995)competition determinants?

Accepted Answer

A)  bargaining power of suppliers 
B)  leverage of the firm 
C)  threat of new entrants 
D)  potential substitutes 
A)  bargaining power of suppliers 
B)  leverage of the firm 
C)  threat of new entrants 
D)  potential substitutes

Question 18

Pattern - recognition statistical tools are used in technical analysis to:

Accepted Answer

A)  see if the company is slightly overbought but no reversal is expected 
B)  see if the market is oversold and bullish 
C)  provide a firmer statistical basis for the identification of buy and sell signals 
D)  see if the company looks oversold and the outlook is bullish 
A)  see if the company is slightly overbought but no reversal is expected 
B)  see if the market is oversold and bullish 
C)  provide a firmer statistical basis for the identification of buy and sell signals 
D)  see if the company looks oversold and the outlook is bullish

Question 19

'Resistance levels' are most frequently used in the area of:

Accepted Answer

A)  asset pricing 
B)  fundamental analysis 
C)  technical analysis 
D)  speculative analysis 
A)  asset pricing 
B)  fundamental analysis 
C)  technical analysis 
D)  speculative analysis

Question 20

Batten and Ellis (1996)examine the performance of various technical trading rules in Australia and find:

Accepted Answer

A)  all the rules outperform a simple buy and hold position after considering transaction costs 
B)  rules of technical analysis are rather arbitrary in nature 
C)  technical analysis rules are best left to statisticians 
D)  none of the rules outperform a simple buy and hold position after considering transaction costs 
A)  all the rules outperform a simple buy and hold position after considering transaction costs 
B)  rules of technical analysis are rather arbitrary in nature 
C)  technical analysis rules are best left to statisticians 
D)  none of the rules outperform a simple buy and hold position after considering transaction costs

The study by Fama and French (1992)showed that,on average,value firms outperformed growth firms by 13% p.a.

In reference to moving averages,another traditional technique used in charting:

A blue-chip share generally exhibits __________ over time.

Fundamental analysis focus more on past price movements of a firm's stock than on the underlying determinants of its future profitability.

The distinguishing feature between blue-chip and green-chip shares is:

A ________ of blue-chip shares is that because they are _ so closely to the market,a portfolio consisting of almost exclusively blue-chip shares will simply perform in _____ with the market.

Shares that are classified as __________ have a high book-to-market ratio.

Firms that have shares with a relatively high value of historical assets in place,are typically growth shares.

Other things being equal,a value firm compared with a growth firm will have:

The most significant determinant of a share price is a company's:

A growth firm has a relatively high book-to-market ratio.

Assuming a cost of equity capital of 18.5%,a growth rate of 9.5% and a rate of return on the (net)assets in place of 12%,what is the book-to-market ratio of this firm?

The various terms that are assigned to more complex charting that involves the plotting of daily high-low closing prices and volume across time are:

The closer the specific attributes of companies,the greater the difference between the value of their shares will occur.

A resistant level is the range of prices at which the technician expects an in the supply of shares such that any price will be __.

According to technical analysis,a series of price increases supported by heavy volume,interspersed with price falls on light volume,may be indicative of a bear market.

Which of the following is NOT one of Reilly and Norton's (1995)competition determinants?

Pattern - recognition statistical tools are used in technical analysis to:

'Resistance levels' are most frequently used in the area of:

Batten and Ellis (1996)examine the performance of various technical trading rules in Australia and find:

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Macro- and Industry Analysis of Share Markets

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

Exam 13: Qualitative Stock Selection

The study by Fama and French (1992)showed that,on average,value firms outperformed growth firms by 13% p.a.

In reference to moving averages,another traditional technique used in charting:

A blue-chip share generally exhibits __________ over time.

Fundamental analysis focus more on past price movements of a firm's stock than on the underlying determinants of its future profitability.

The distinguishing feature between blue-chip and green-chip shares is:

A ____________ of blue-chip shares is that because they are _________ so closely to the market,a portfolio consisting of almost exclusively blue-chip shares will simply perform in _________ with the market.

Shares that are classified as __________ have a high book-to-market ratio.

Firms that have shares with a relatively high value of historical assets in place,are typically growth shares.

Other things being equal,a value firm compared with a growth firm will have:

The most significant determinant of a share price is a company's:

A growth firm has a relatively high book-to-market ratio.

Assuming a cost of equity capital of 18.5%,a growth rate of 9.5% and a rate of return on the (net)assets in place of 12%,what is the book-to-market ratio of this firm?

The various terms that are assigned to more complex charting that involves the plotting of daily high-low closing prices and volume across time are:

The closer the specific attributes of companies,the greater the difference between the value of their shares will occur.

A resistant level is the range of prices at which the technician expects an __________ in the supply of shares such that any price will be ____________.

According to technical analysis,a series of price increases supported by heavy volume,interspersed with price falls on light volume,may be indicative of a bear market.

Which of the following is NOT one of Reilly and Norton's (1995)competition determinants?

Pattern - recognition statistical tools are used in technical analysis to:

'Resistance levels' are most frequently used in the area of:

Batten and Ellis (1996)examine the performance of various technical trading rules in Australia and find:

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Macro- and Industry Analysis of Share Markets

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

A ________ of blue-chip shares is that because they are _ so closely to the market,a portfolio consisting of almost exclusively blue-chip shares will simply perform in _____ with the market.

A resistant level is the range of prices at which the technician expects an in the supply of shares such that any price will be __.