Question 1

Jaffee found that stock prices __________ after insiders intensively bought shares and __________ after insiders intensively sold shares.

Accepted Answer

A)  decreased, decreased 
B)  decreased, increased 
C)  increased, decreased 
D)  increased, increased 
A)  decreased, decreased 
B)  decreased, increased 
C)  increased, decreased 
D)  increased, increased

Question 2

According to results by Seyhun __________.

Accepted Answer

A)  investors cannot usually earn abnormal returns by following inside trades after knowledge of the trades are made public 
B)  investors can usually earn abnormal returns by following inside trades after knowledge of the trades are made public 
C)  investors cannot earn abnormal returns by following inside trades before knowledge of the trades are made public 
D)  investors cannot earn abnormal returns by trading before insiders 
A)  investors cannot usually earn abnormal returns by following inside trades after knowledge of the trades are made public 
B)  investors can usually earn abnormal returns by following inside trades after knowledge of the trades are made public 
C)  investors cannot earn abnormal returns by following inside trades before knowledge of the trades are made public 
D)  investors cannot earn abnormal returns by trading before insiders

Question 3

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?

Accepted Answer

A)  $4,000 
B)  $8,000 
C)  $12,000 
D)  $16,000 
A)  $4,000 
B)  $8,000 
C)  $12,000 
D)  $16,000

Question 4

Banz found that,on average,the risk-adjusted returns of small firms __________.

Accepted Answer

A)  was higher than the risk-adjusted returns of large firms 
B)  was the same as the risk-adjusted returns of large firms 
C)  was lower than the risk-adjusted returns of large firms 
D)  was negative 
A)  was higher than the risk-adjusted returns of large firms 
B)  was the same as the risk-adjusted returns of large firms 
C)  was lower than the risk-adjusted returns of large firms 
D)  was negative

Question 5

You believe that stock prices 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 but you do not believe stock prices reflect all publicly available or inside information.You are a proponent of ____________.

Accepted Answer

A)  semi-strong 
B)  strong 
C)  weak 
D)  perfect 
A)  semi-strong 
B)  strong 
C)  weak 
D)  perfect

Question 6

When the market risk premium rises,stock prices will ________.

Accepted Answer

A)  rise 
B)  fall 
C)  recover 
D)  have excess volatility 
A)  rise 
B)  fall 
C)  recover 
D)  have excess volatility

Jaffee found that stock prices after insiders intensively bought shares and after insiders intensively sold shares.

According to results by Seyhun __________.

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?

Banz found that,on average,the risk-adjusted returns of small firms __________.

When the market risk premium rises,stock prices will ________.

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Mutual Funds and Other Investment Companies

Risk and Return: Past and Prologue

Efficient Diversification

Capital Asset Pricing and Arbitrage Pricing Theory

Behavioral Finance and Technical Analysis

Bond Prices and Yields

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Financial Statement Analysis

Options Markets

Option Valuation

Futures Markets and Risk Management

Portfolio Performance Evaluation

Globalization and International Investing

Hedge Funds

Taxes,inflation,and Investment Strategy

Investors and the Investment Process

Filters

Exam 8: The Efficient Market Hypothesis

Jaffee found that stock prices __________ after insiders intensively bought shares and __________ after insiders intensively sold shares.

According to results by Seyhun __________.

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?

Banz found that,on average,the risk-adjusted returns of small firms __________.

When the market risk premium rises,stock prices will ________.

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Mutual Funds and Other Investment Companies

Risk and Return: Past and Prologue

Efficient Diversification

Capital Asset Pricing and Arbitrage Pricing Theory

Behavioral Finance and Technical Analysis

Bond Prices and Yields

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Financial Statement Analysis

Options Markets

Option Valuation

Futures Markets and Risk Management

Portfolio Performance Evaluation

Globalization and International Investing

Hedge Funds

Taxes,inflation,and Investment Strategy

Investors and the Investment Process

Filters

Jaffee found that stock prices after insiders intensively bought shares and after insiders intensively sold shares.