罗斯公司理财题库全集(共108页).doc

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1、精选优质文档-倾情为你奉上Chapter 14Efficient Capital Markets and Behavioral Challenges Multiple Choice Questions1.An efficient capital market is one in which:A.brokerage commissions are zero.B.taxes are irrelevant.C.securities always offer a positive rate of return to investors.D.security prices are guaranteed

2、by the . Securities and Exchange Commission to be fair.E.security prices reflect available information.2.The notion that actual capital markets, such as the NYSE, are fairly priced is called the:A.Efficient Markets Hypothesis (EMH).B.Law of One Price.C.Open Markets Theorem.D.Laissez-Faire Axiom.E.Mo

3、nopoly Pricing Theorem.3.The hypothesis that market prices reflect all available information of every kind is called _ form efficiency.A.openB.strongC.semistrongD.weakE.stable4.The hypothesis that market prices reflect all publicly available information is called _ form efficiency.A.openB.strongC.se

4、mistrongD.weakE.stable5.The hypothesis that market prices reflect all historical information is called _ form efficiency.A.openB.strongC.semistrongD.weakE.stable6.In an efficient market, the price of a security will:A.always rise immediately upon the release of new information with no further price

5、adjustments related to that information.B.react to new information over a two-day period after which time no further price adjustments related to that information will occur.C.rise sharply when new information is first released and then decline to a new stable level by the following day.D.react imme

6、diately to new information with no further price adjustments related to that information.E.be slow to react for the first few hours after new information is released allowing time for that information to be reviewed and analyzed.7.If the financial markets are efficient, then investors should expect

7、their investments in those markets to:A.earn extraordinary returns on a routine basis.B.generally have positive net present values.C.generally have zero net present values.D.produce arbitrage opportunities on a routine basis.E.produce negative returns on a routine basis.8.Which one of the following

8、statements is correct concerning market efficiencyA.Real asset markets are more efficient than financial markets.B.If a market is efficient, arbitrage opportunities should be common.C.In an efficient market, some market participants will have an advantage over others.D.A firm will generally receive

9、a fair price when it sells shares of stock.E.New information will gradually be reflected in a stocks price to avoid any sudden change in the price of the stock.9.According to the efficient market hypothesis, financial markets fluctuate daily because they:A.are inefficient.B.slowly react to new infor

10、mation.C.are continually reacting to new information.D.offer tremendous arbitrage opportunities.E.only reflect historical information.10.Insider trading does not offer any advantages if the financial markets are:A.weak form efficient.B.semiweak form efficient.C.semistrong form efficient.D.strong for

11、m efficient.E.inefficient.11.According to theory, studying historical prices in order to identify mispriced stocks will not work in markets that are _ efficient.I. weak formII. semistrong formIII. strong formA.I onlyB.II onlyC.I and II onlyD.II and III onlyE.I, II, and III12.Which of the following t

12、end to reinforce the argument that the financial markets are efficient？I. Information spreads rapidly in todays world.II. There is tremendous competition in the financial markets.III. Market prices continually fluctuate.IV. Market prices react suddenly to unexpected news announcements.A.I and III on

13、lyB.II and IV onlyC.I, II, and III onlyD.II, III, and IV onlyE.I, II, III, and IV13.If you excel in analyzing the future outlook of firms, you would prefer that the financial markets be _ form efficient so that you can have an advantage in the marketplace.A.weakB.semiweakC.semistrongD.strongE.perfec

14、t14.Your best friend works in the finance office of the Delta Corporation. You are aware that this friend trades Delta stock based on information he overhears in the office. You know that this information is not known to the general public. Your friend continually brags to you about the profits he e

15、arns trading Delta stock. Based on this information, you would tend to argue that the financial markets are at best _ form efficient.A.weakB.semiweakC.semistrongD.strongE.perfect15.The . Securities and Exchange Commission periodically charges individuals for insider trading and claims those individu

16、als have made unfair profits. Based on this fact, you would tend to argue that the financial markets are at best _ form efficient.A.weakB.semiweakC.semistrongD.strongE.perfect16.Individuals that continually monitor the financial markets seeking mispriced securities:A.tend to make substantial profits

17、 on a daily basis.B.tend to make the markets more efficient.C.are never able to find a security that is temporarily mispriced.D.are always quite successful using only well-known public information as their basis of evaluation.E.are always quite successful using only historical price information as t

18、heir basis of evaluation.17.Efficient capital markets are financial markets:A.in which current market prices reflect available information.B.in which current market prices reflect the present value of securities.C.in which there is no excess profit from using available information.D.All of the above

19、.E.None of the above.18.If the efficient market hypothesis holds, investors should expect:A.to earn only a normal return.B.to receive a fair price for their securities.C.to always be able to pick stocks that will outperform the market averages.D.Both A and B.E.Both B and C.19.Financial managers can

20、create value through financing decisions that:A.reduce costs or increase subsidies.B.increase the product prices.C.create a new security.D.Both A and B.E.Both A and C.20.In an efficient market when a firm makes an announcement of a new product or product enhancement with superior technology providin

21、g positive NPV, the price of the stock will:A.rise gradually over the next few days.B.decline gradually over the next few days.C.rise on the same day to the new price.D.stay at the same price, with no net effect.E.drop on the same day to the new price.21.An investor discovers that for a certain grou

22、p of stocks, large positive price changes are always followed by large negative price changes. This finding is a violation of the:A.moderate form of the efficient market hypothesis.B.semistrong form of the efficient market hypothesis.C.strong form of the efficient market hypothesis.D.weak form of th

23、e efficient market hypothesis.E.None of the above.22.Which of the following would be indicative of inefficient marketsA.Overreaction and reversionB.Delayed responseC.Immediate and accurate responseD.Both A and B.E.Both A and C.23.When the stock price follows a random walk, the price today is said to

24、 be equal to the prior period price plus the expected return for the period with any remaining difference to the actual return due to:A.a predictable amount based on the past prices.B.a component based on new information unrelated to past prices.C.the securitys risk.D.the risk free rate.E.None of th

25、e above.24.Which form of the efficient market hypothesis implies that security prices reflect only information contained in past pricesA.Weak formB.Semistrong formC.Strong formD.Hard formE.Past form25.If the weak form of efficient markets holds, then:A.technical analysis is useless.B.stock prices re

26、flect all information contained in past prices.C.stock prices follow a random walk.D.All of the above.E.None of the above.26.Under the concept of an efficient market, a random walk in stock prices means that:A.there is no driving force behind price changes.B.technical analysts can predict future pri

27、ce movements to earn excess returns.C.the unexplained portion of price change in one period is unrelated to the unexplained portion of price change in any other period.D.the unexplained portion of price change in one period that can not be explained by expected return can only be explained by the un

28、explained portion of price change in a prior period.E.None of the above.27.A semistrong form efficient market is distinct from a weak form efficient market by:A.incorporating only random movements in the price.B.incorporating all publicly available information in the price.C.incorporating inside inf

29、ormation in the price.D.All of the above.E.None of the above.28.If a market is strong form efficient, it also implies that:A.semistrong form efficiency holds.B.weak form efficiency holds.C.one cannot earn abnormal returns with inside information.D.Both A and C.E.A, B and C.29.An investor discovers t

30、hat predictions about weather patterns published years in advance and found in the Farmers Almanac are amazingly accurate. In fact, these predictions enable the investor to predict the health of the farm economy and therefore certain security prices. This finding is a violation of the:A.moderate for

31、m of the efficient market hypothesis.B.semistrong form of the efficient market hypothesis.C.strong form of the efficient market hypothesis.D.weak form of the efficient market hypothesis.E.None of the above.30.A lawyer works for a firm that advises corporate firms planning to sue other corporations f

32、or antitrust damages. He finds that he can beat the market by short-selling the stock of the firm that will be sued. This finding is a violation of the:A.moderate form of the efficient market hypothesis.B.semistrong form of the efficient market hypothesis.C.strong form of the efficient market hypoth

33、esis.D.weak form of the efficient market hypothesis.E.None of the above.31.An investor discovers that stock prices change drastically as a result of certain events. This finding is a violation of the:A.moderate form of the efficient market hypothesis.B.semistrong form of the efficient market hypothe

34、sis.C.strong form of the efficient market hypothesis.D.weak form of the efficient market hypothesis.E.None of the above.32.The semistrong form of the efficient market hypothesis states that:A.all information is reflected in the price of securities.B.security prices reflect all publicly available inf

35、ormation.C.future prices are predictable.D.Both A and C.E.None of the above.33.The market price of a stock moves or fluctuates daily. This fluctuation is:A.inconsistent with the semistrong efficient market hypothesis because prices should be stable.B.inconsistent with the weak form efficient market

36、hypothesis because all past information should be priced in.C.consistent with the semistrong form of the efficient market hypothesis because as new information arrives daily prices will adjust to it.D.consistent with the strong form because prices are controlled by insiders.E.None of the above.34.An

37、 investor who picks a portfolio by throwing darts at the financial pages:A.believes that efficient markets will protect the portfolio from harm as all information is priced.B.believes that riskier portfolios earn the same as less risky portfolios.C.does so because stock prices do not matter; only ca

38、sh flow generated matters.D.Both A and C.E.Both B and C.35.Suppose that firms with unexpectedly high earnings earn abnormally high returns for several months after the announcement. This would be evidence of:A.efficient markets in the weak form.B.inefficient markets in the weak form.C.efficient mark

39、ets in the semistrong form.D.inefficient markets in the semistrong form.E.inefficient markets in the strong form.36.Which of the following is not true about serial correlationA.It measures the correlation between the current return on a security and the current return on another security.B.It involv

40、es only one security.C.Positive serial correlation indicates a tendency for continuation.D.Negative serial correlation indicates a tendency toward reversal.E.Significant positive or negative serial correlation coefficients are indicative of market inefficiency in the weak form.37.Which of the follow

41、ing is trueA.A random walk for stock price changes is inconsistent with observed patterns in price changes.B.If the stock market follows a random walk, price changes should be highly correlated.C.If the stock market is weak form efficient, then stock prices follow a random walk.D.All of the above.E.

42、Both B and C.38.Event studies attempt to measure:A.the influence of information released to the market on returns in days surrounding its announcement.B.if the market is at least semistrong form efficient.C.whether there is a significant reaction to public announcements.D.All of the above.E.None of

43、the above.39.The abnormal return in an event study is described as:A.the return earned on the day of announcement for the stock.B.the excess return earned on the day of announcement for the stock.C.the total return earned for the investment holding period.D.All of the above.E.None of the above.40.Ev

44、idence on stock prices finds that the sudden death of a chief executive officer causes stock prices to fall and the sudden death of an active founding chief executive officer causes stock price to rise. This contrary evidence happens because:A.markets are inefficient and unsure of the real value of

45、the events.B.death is inevitable and market prices are random.C.things simply happen.D.the value of the founding executive was a negative to the firm.E.None of the above.41.Studies of the performance of professionally managed mutual funds find that these funds:A.do not outperform a market index. Ass

46、uming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.B.do not outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the effici

47、ent market hypothesis.C.outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.D.outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.E.Both C and D.42.Which of the following statements is trueA.