Exam 13: Efficient Capital Markets and Behavioral Challenges

arrow
  • Select Tags
search iconSearch Question
flashcardsStudy Flashcards
  • Select Tags

Stock prices fluctuate daily.In relation to the efficient market hypothesis,these fluctuations are:

Free
(Multiple Choice)
4.8/5
(40)
Correct Answer:
Verified

C

The efficient market hypothesis supports which one of these statements?

Free
(Multiple Choice)
4.9/5
(31)
Correct Answer:
Verified

D

If the market is fully efficient,then an announcement by a firm of a new product with a high net present value will cause the market price of that firm's stock to:

Free
(Multiple Choice)
4.8/5
(49)
Correct Answer:
Verified

D

Which one of these is an indicator that a market is efficient?

(Multiple Choice)
4.7/5
(37)

The efficient market hypothesis says that on average managers will:

(Multiple Choice)
4.9/5
(37)

Explain why in an efficient market investments have an expected net present value (NPV)of zero.

(Essay)
4.8/5
(32)

Which of these help prevent arbitrage from totally correcting market mispricings? I.Trading costs II.Market domination by rational professionals III.Number of amateur investors IV.Near-term risk

(Multiple Choice)
4.8/5
(33)

Serial correlation:

(Multiple Choice)
4.8/5
(35)

Which one of these can be used as an argument that independent deviations from rationality are not generally random?

(Multiple Choice)
4.8/5
(37)

The U.S.Securities and Exchange Commission periodically charges individuals for insider trading and claims those individuals have made unfair profits.Based on this fact,you would tend to argue that the financial markets are at best _____ form efficient.

(Multiple Choice)
5.0/5
(46)

The hypothesis that market prices reflect all available information of every kind is called _____ form efficiency.

(Multiple Choice)
4.9/5
(37)

Which of these are reasons why people do not accept the efficient market hypothesis? I.Optical illusions II.Normal profits III.Earnings surprises IV.Market bubbles

(Multiple Choice)
4.8/5
(35)

Even though no final conclusion is currently warranted,a number of research papers,including those of Fama and French,have argued that:

(Multiple Choice)
4.9/5
(29)

If behavioral finance holds,this implies:

(Multiple Choice)
4.9/5
(36)

Why do you think it is difficult for researchers to agree on principles related to behavioral finance?

(Essay)
4.7/5
(38)

If you live in a remote area with limited access to the news but do a lot of historical research on firms,you would prefer that the financial markets be ____ form efficient so you can have an advantage in the marketplace.

(Multiple Choice)
4.7/5
(31)

Sam,an avid day trader,has noticed that a particular stock has increased in value in each of the last three trading days.Given this trend,he believes the stock price will increase over the next two trading days.This is an example of:

(Multiple Choice)
4.8/5
(39)

Market prices can be efficiently priced if:

(Multiple Choice)
4.9/5
(37)

The cause of the October 19,1987 stock market crash:

(Multiple Choice)
4.9/5
(31)

What are the basic principles behind behavioral finance?

(Essay)
4.7/5
(46)
Showing 1 - 20 of 48
close modal

Filters

  • Essay(0)
  • Multiple Choice(0)
  • Short Answer(0)
  • True False(0)
  • Matching(0)