Professional Documents
Culture Documents
Bearer securities
Registered Securities
Undivided Security
None of these
2. ..refers to the analysis of trading securities from the point of their prices, returns and
risks.
a.
b.
c.
d.
Registered Securities
Fungible
Security analysis
None of these
3. Certificates bearing the name of the holder are issued, but these merely represent the securities is
known as
a.
b.
c.
d.
registered securities
Divided Security
Bearer securities
None of these
4. The is the value of the productive assets of the firm, not just its equity value, based on the
accounting identity
a.
b.
c.
d.
equity value
enterprise value
exact currency
net values
5. The security analyst must have a thorough understanding of financial statements, which are an
important source of this information.
a. True
b. False
6. Which of the following portfolio statistics statements is correct?
a. A portfolio's expected return is a simple weighted average of expected returns of the
individual securities comprising the portfolio.
b. A portfolio's standard deviation of return is a simple weighted average of individual security
return standard deviations.
c. The square root of a portfolio's standard deviation of return equals its variance.
d. The square root of a portfolio's standard deviation of return equals its coefficient of
variation.
7. Total portfolio risk is ...
a.
b.
c.
d.
Systematic risk
Standard deviation.
Unsystematic risk
Coefficient of variation.
9. .. is the variability of return on stocks or portfolios associated with changes in return on the
market as a whole.
a.
b.
c.
d.
Systematic risk
Standard deviation
Unsystematic risk
Coefficient of variation
10. Which of the following indexes would be most the appropriate proxy to measure the return of the market
portfolio in the CAPM?
a.
b.
c.
d.
11. The .describes the linear relationship between expected rates of return for individual
securities (or portfolios) and ...
a.
b.
c.
d.
12. The .. describes the relationship between an individual security's returns and returns on the
market portfolio. The slope of this line is
a. security market line; beta
Beta.
Standard deviation.
Coefficient of variation.
Variance.
14. Which of the following items is a model that describes the relationship between risk and expected return
(in this model the expected return is equal to the risk-free return plus a premium based on the systematic
risk of the security)?
a.
b.
c.
d.
Beta.
Characteristic line.
Capital asset pricing model.
Efficient markets model.
15. Which form of market efficiency states that current security prices fully reflect all information, both
public and private?
a. Weak.
b. Semi-strong.
c. Strong.
16. The weighted average of possible returns, with the weights being the probabilities of occurrence is
referred to as .
a.
b.
c.
d.
a probability distribution
the expected return
the standard deviation
coefficient of variation
17. Which form of market efficiency states that current prices fully reflect all publicly available information?
a. Weak.
b. Semi-strong.
c. Strong.
18. A set of possible values that a random variable can assume and their associated probabilities of
occurrence are referred to as .
a. probability distribution
b. the expected return
c. the standard deviation
d. coefficient of variation
19. A statistical measure of the variability of a distribution around its mean is referred to as .
a.
b.
c.
d.
a probability distribution
the expected return
the standard deviation
coefficient of variation
20. The ratio of the standard deviation of a distribution to the mean of that distribution is referred to as
.
a.
b.
c.
d.
a probability distribution
the expected return
the standard deviation
coefficient of variation
2.(c)
3.(a)
4.(b)
5.(a)
6. (a)
7.(d)
8.(c)
9.(a)
10.(b)
11. (d)
12.(b)
13.(a)
14.(c)
15.(c)
16. (c)
17.(b)
18.(a)
19.(c)
20.(d)
Value.
Retention ratio.
Discount rate.
Dividend payout ratio.
2. Which of the following is equal to the present value of all cash proceeds received by a stock investor?
a.
b.
c.
d.
Discount rate.
Retention ratio.
Value.
Dividend payout ratio.
3. Which of the following best describes the constant-growth dividend discount model?
a.
b.
c.
d.
4. Which of the following do financial analysts consider least important when assessing the long-run
economic and financial outlook of a company?
a.
b.
c.
d.
5. Analysts commonly consider all of the following to be indicators that the market is overvalued except:
a.
b.
c.
d.
6. If the intrinsic value of a share of common stock is less than its market value, which of the following is the
most reasonable conclusion?
a.
b.
c.
d.
7. When the market's required rate of return for a particular bond is less than its coupon rate, the bond is
referred to as a ..
a.
b.
c.
d.
premium bond
discount bond
par bond
face bond
8. If an investor may have to sell a bond prior to maturity and interest rates have risen since the bond was
purchased, the investor is exposed to .
a.
b.
c.
d.
9. Market interest rates and the prices of bonds in the secondary market:
a.
b.
c.
d.
17. ..are call options issued by the firm and that would require new shares to be issued if
exercised.
a.
b.
c.
d.
Project
Warrants
Share Buy-back
None of these
18. .in fixed-income securities are typically looking for a constant and secure return on their
investment.
a.
b.
c.
d.
Investors
Pricing Factors
Terminology
Derivatives
19. When rates are rising, market prices of existing debt securities will fall, as demand increases for newissue securities with the higher rates is known as.
a. Interest Rate Risk
b. Another Factor
c. Credit Risk
d. Purchasing Power Risk
20. A change in either the issuers credit rating or the markets perception of the issuers business
prospects will affect the value of its outstanding securities is
a.
b.
c.
d.
2.(c)
3.(c)
4.(c)
5.(b)
6. (d)
7.(a)
8.(b)
9.(a)
10.(a)
11. (c)
12.(b)
13.(d)
14.(a)
15.(a)
16. (c)
17.(b)
18.(a)
19.(a)
20.(c)
The number of on-line discount brokers is the largest type of discount broker.
Discount brokers only execute orders on stock transactions.
Discount brokers may offer little investment advice.
All of the above statements are true.
commission broker
floor broker
specialist
delegate
of Justice.
True
False
9. Insider trading often occurs when mergers and takeovers are imminent.
a.
b.
True
False
Buildings are
Land is a
Derivatives are
U. S. Agency bonds are
C and D
13. Master shares are quoted on the stock market and so can be bought or sold at any time.
a.
b.
True
False
Globalization
securitization
information and computer networks
all of the above
15. A .is a person or firm that buys and sells for his or her own inventory of
securities and for others.
a.
b.
c.
d.
broker
dealer
broker-dealer
None of these
16. A broker acts as a go between and, in doing so, does not assume any risk for the trade.
a.
b.
True
False
17. A is an individual who has passed the NASDs registration process and is
therefore licensed to work in the securities industry.
a.
b.
c.
d.
18. .are dealers who specialize in particular securities traded on the over thecounter market.
a.
b.
c.
d.
Market makers
Specialists
Market Makers
None of these
19. Stock market indicators have revolutionized the way market participants trade the market.
a.
b.
True
False
d.
has been enhanced due the recent misuse and negative publicity regarding these
instrument
2.(d)
3.(c)
4.(c)
5.(b)
6. (b)
7.(b)
8.(b)
9.(a)
10.(e)
11. (e)
12.(d)
13.(a)
14.(d)
15.(b)
16. (a)
17.(b)
18.(a)
19.(a)
20.(a)
1. The following security has provided the best hedge against inflation in the long-run:
a.
b.
c.
d.
Corporate Bonds
Treasury Bills
Common Stocks
U.S. Government Bonds
3. Beta measures:
a.
b.
c.
d.
5. No matter how large the number of stocks in the portfolio is, the risk that cannot be
diversified away is the:
a.
b.
c.
d.
company-specific risk
unsystematic risk
systematic risk
unique risk
0.0
2.0
-1.0
1.0
8. According to the security market line, the expected return of any security is a function of:
a.
b.
c.
d.
total risk
diversifiable risk
unique risk
systematic risk
9. According to the capital market line, the expected return of any efficient portfolio is a
function of:
a.
b.
c.
d.
beta
total risk
unsystematic risk
unique risk
zero alphas
negative alphas
positive alphas
zero betas
11. According to the CAPM, the risk premium an investor expects to receive on any stock
increases:
a.
b.
c.
d.
Richard Roll
William Sharpe
Harry Markowitz
Stephen Ross
13. According to the single index model, the inflation risk is an example of:
a. total risk
b. unsystematic risk
c. diversifiable risk
14. Which one of the following is not a factor identified by APT empirical studies?
a.
b.
c.
d.
Market portfolio
Unanticipated changes in bond default premiums
Unanticipated changes in inflation
Unanticipated changes in the growth rate of corporate profits
16. Suppose you have 20 stocks, and you want to derive the efficient frontier. How many
covariances do you have to calculate?
a.
b.
c.
d.
190
20
90
200
18. Which of the following statements is true according to the theory of arbitrage?
a.
b.
c.
d.
Rational investors will arbitrage in a manner consistent with their risk tolerance.
Low-beta stocks are consistently overpriced.
Positive alpha stocks will quickly disappear.
Negative alpha stocks cannot be arbitraged.
19. is a function of the operating conditions faced by a firm and the variability these conditions
inject into operating income and expected dividends
a. Business risk
b. Financial Risk
c. Assigning Risk
d. None of these
20. To quantify the separate effects of each type of systematic and unsystematic risk is difficult
because of overlapping effects and the sheer complexity involved.
a. True
b. False
Answers for Self Assessment Questions
1. (c)
2.(c)
3.(c)
4.(d)
5.(c)
6. (d)
7.(c)
8.(d)
9.(b)
10.(b)
11. (c)
12.(d)
13.(b)
14.(a)
15.(c)
16. (a)
17.(d)
18.(c)
19.(a)
20.(a)
1. Which one of the following best describes the concept of stock market pricing efficiency?
a. In a pricing efficient market the costs of buying and selling shares are very low
b. In an efficient market the current price of all shares accurately reflects the future
cash flows that will accrue to the shareholders
c. In an efficient market prices rationally reflect available information
d. In an efficient market it is possible to use inside knowledge to make abnormally
high returns on invested money
2. Which of the following is not an advantage of an efficient share market?
a.
b.
c.
d.
3. To say that share prices move in random walk is to mean which of the following?
a. The share market is irrational and akin to a casino
b. Share prices at any one time reflect all available information and the price will
only change in response to new information; successive price changes will be
independent and prices
c. Share prices respond to news events in a random fashion
d. Share price moves are determined in the same random fashion as the outcome of
tossing a coin - there is no underlying rationale for a particular move
4. Which one of the following is false?
a. Semi-strong form share price efficiency means that share prices fully reflect all
past price movements plus all the information released by the firm
b. Insider dealing can lead to abnormally high returns on share investments
c. Strong form efficiency means that all relevant information, including that which
is privately held, is reflected in the share price
d. Weak form share price efficiency means that share prices fully reflect all
information contained in past price movements
5. Which of the following is false?
a. Pricing efficiency refers to the extent to which the potential for abnormal returns
from stock market investment is removed because shares move instantaneously
in an unbiased manner to any news
b. Operational efficiency refers to the cost to buyers and sellers of transactions in
securities on the stock exchange
c. Flexible efficiency refers to the responsiveness of share prices to new information
d. Allocation efficiency refers to the mechanism for allocating society's scare
resources to where they can be most productive
6. A bar chart is used to illustrate:
a.
b.
c.
d.
7. According to the Dow Theory, daily fluctuations and secondary movements in the stock
market are used to identify the:
a.
b.
c.
d.
moving average
short-term trend
intermediate trend
primary trend
10. Which of the following highlights traders' opinions about the market?
a. Sentiment indicators
b. Moving averages
c. Breadth indicators
d. Leading indicators
11. When odd-lot selling exceeds odd-lot buying, this is considered a:
a. bullish signal
b. bearish signal by some technical analysts and as a bullish signal by other
technical analysts
c. neutral signal
d. bearish signal
12. When technical analysts say a stock has good relative strength, they mean the:
(CFA related question)
a.
b.
c.
d.
recent trading volume in the stock has exceeded the normal trading volume
ratio of the price of the stock to a market index has trended upwards
stock has performed well compared to other stocks in the same industry
ratio of the price of the stock to a market index has trended downwards
14. A resistance level is the price range at which technical analysts would expect the:
(CFA related question)
a. demand of a stock to decrease substantially
b. demand of a stock to increase substantially
c. supply of a stock to decrease substantially
d. both b and c
15. Many people rightly believe that when you buy a share of stock you are buying a
proportional share in a business.
a. True
b. False
16. .is the idea that you should buy stock in companies whose potential for growth
in sales and earnings is excellent.
a.
b.
c.
d.
common stocks
Growth investing
businesses selling
None of these
17. Quantitative analysts view these things as subjective judgments, and instead focus on the
incontrovertible objective data that can be analyzed.
a. True
b. False
18. ..is the process of looking at a business at the basic or fundamental financial
level.
a.
b.
c.
d.
19. ..is one measure of how efficiently a company uses its assets to produce
earnings.
a.
b.
c.
d.
Book Value
Return on Equity (ROE)
Dividend Yield
None of these
20. The BSE has set various guidelines and forms that need to be adhered to and submitted by
the companies.
a. True
b. False
2.(d)
3.(b)
4.(a)
5.(c)
6. (c)
7.(d)
8.(b)
9.(d)
10.(d)
11. (d)
12.(d)
13.(c)
14.(a)
15.(a)
16. (b)
17.(a)
18.(c)
19.(b)
20.(a)
1. According to Markowitz, rational investors will seek efficient portfolios because these
portfolios are optimal based on:
a.
b.
c.
d.
expected return.
risk.
expected return and risk.
transactions costs.
3. A major assumption of the Markowitz model is that investors base their decisions strictly on
expected return and risk factors.
a.
b.
True
False
risk averse.
risk neutral.
risk seekers.
risk moderators.
7. When using the Markowitz model, aggressive investors would select portfolios on the left
end of the efficient frontier.
a.
b.
True
False
represent
10. Portfolios lying on the upper right portion of the efficient frontier are likely to be chosen by
a.
b.
c.
d.
aggressive investors.
conservative investors.
risk-averse investors.
defensive investors.
optimal.
unattainable.
dominant.
dominated.
lowest risk.
highest risk.
highest utility.
least investment.
14. The basis for constructing a portfolio should reflect the enterprises particular needs.
a.
True
b.
False
15. Different investors will estimate the inputs to the Markowitz model differently because:
a.
b.
c.
d.
16. Which of the following is not true regarding the Markowitz theory?
a.
b.
c.
d.
17. The Markowitz model selects the portfolio most appropriate for an individual investor.
a.
b.
True
False
cannot be determined.
occurs at the point of tangency between the highest indifference curve and the
highest expected return.
occurs at the point of tangency between the highest indifference curve and the
efficient set of portfolios.
occurs at the point of tangency between the highest expected return and lowest
risk efficient portfolios.
True
False
20. Which of the following is not one of the assumptions of portfolio theory?
a.
b.
c.
d.
Liquidity of positions.
Investor preferences are based only on expected return and risk.
Low transactions costs.
A single investment period.
2.(b)
3.(a)
4.(a)
5.(a)
6. (a)
7.(b)
8.(b)
9.(c)
10.(a)
11. (d)
12.(c)
13.(c)
14.(a)
15.(c)
16. (a)
17.(b)
18.(b)
19.(b)
20.(d)
1. . is equal to the total market value of the firm's common stock divided by (the
replacement cost of the firm's assets less liabilities).
A. Book value per share
B. Liquidation value per share
C. Market value per share
D. Tobin's Q
E. None of the above.
2. High P/E ratios tend to indicate that a company will , ceteris paribus.
A. grow quickly
B. grow at the same speed as the average company
C. grow slowly
D. not grow
E. none of the above
3. is equal to (common shareholders' equity/common shares outstanding).
A. Book value per share
B. Liquidation value per share
C. Market value per share
D. Tobin's Q
E. none of the above
4. .. are analysts who use information concerning current and prospective profitability
of a firms to assess the firm's fair market value.
A. Credit analysts
B. Fundamental analysts
C. Systems analysts
D. Technical analysts
E. Specialists
5. The _______ is defined as the present value of all cash proceeds to the investor in the stock.
A. dividend payout ratio
B. intrinsic value
C. market capitalization rate
D. plowback ratio
E. none of the above
6. _______ is the amount of money per common share that could be realized by breaking up the
firm, selling the assets, repaying the debt, and distributing the remainder to shareholders.
A. Book value per share
B. Liquidation value per share
C. Market value per share
D. Tobin's Q
E. None of the above
7. Since 1955, Treasury bond yields and earnings yields on stocks were .
A. identical
B. negatively correlated
C. positively correlated
D. uncorrelated
8. Historically, P/E ratios have tended to be .
A. higher when inflation has been high
B. lower when inflation has been high
C. uncorrelated with inflation rates but correlated with other macroeconomic variables
D. uncorrelated with any macroeconomic variables including inflation rates
E. none of the above
9. The is a common term for the market consensus value of the required return on a
stock.
A. dividend payout ratio
B. intrinsic value
C. market capitalization rate
D. plowback rate
E. none of the above
10. The . is the fraction of earnings reinvested in the firm.
A. dividend payout ratio
B. retention rate
C. plowback ratio
D. A and C
E. B and C
11. The Gordon model
A. is a generalization of the perpetuity formula to cover the case of a growing perpetuity.
B. is valid only when g is less than k.
C. is valid only when k is less than g.
D. A and B.
E. A and C.
12. Music Doctors Company has an expected ROE of 14%. The dividend growth rate will be
if the firm follows a policy of paying 60% of earnings in the form of dividends.
A. 4.8%
B. 5.6%
C. 7.2%
D. none of the above
13. Medtronic Company has an expected ROE of 16%. The dividend growth rate will be
. if the firm follows a policy of paying 70% of earnings in the form of dividends.
A. 3.0%
B. 6.0%
C. 7.2%
D. 4.8%
E. none of the above
14. High Speed Company has an expected ROE of 15%. The dividend growth rate will be
. if the firm follows a policy of paying 50% of earnings in the form of dividends.
A. 3.0%
B. 4.8%
C. 7.5%
D. 6.0%
E. none of the above
15. Light Construction Machinery Company has an expected ROE of 11%. The dividend growth
rate will be .. if the firm follows a policy of paying 25% of earnings in the form of
dividends.
A. 3.0%
B. 4.8%
C. 8.25%
D. 9.0%
16. One of the problems with attempting to forecast stock market values is that
A. there are no variables that seem to predict market return.
B. the earnings multiplier approach can only be used at the firm level.
C. the level of uncertainty surrounding the forecast will always be quite high.
D. dividend payout ratios are highly variable.
17. The most popular approach to forecasting the overall stock market is to use
2.(a)
3.(a)
4.(b)
5.(b)
6. (b)
7.(c)
8.(b)
9.(c)
10.(e)
11. (d)
12.(b)
13.(d)
14.(c)
15.(c)
16. (c)
17.(d)
18.(c)
19.(a)
20.(c)
2. The risk profile of hedge funds ______, making performance evaluation ______.
a.
b.
c.
d.
3. Perhaps we have noticed all those mutual fund ads that quote their amazingly high one-year rates of
return.
a. True
b. False
4. Hedge funds are .transparent than mutual funds because of . strict SEC
regulation on hedge funds.
a.
b.
c.
d.
more; more
more; less
less; less
none of the above
distressed firms
convertible bonds
currency speculation
all of the above
6. The mutual fund industry witnessed robust growth and stricter regulation from the SEBI after the year
1996.
a. True
b. False
7. A hedge fund attempting to profit from a change in the spread between mortgages and
Treasuries is using a strategy.
a.
b.
c.
d.
market neutral
directional
relative value
divergence
January effect
Santa effect
size effect
none of the above
9. Which of the following was not suggested by John Maynard Keynes as a reason for holding
cash?
a.
b.
c.
d.
Speculative motive.
Investment motive.
Precautionary motive.
Transactions motive.
10. Which of the following statements most accurately describes the modern approach to cash
management?
a. Cash management involves the efficient disbursement of cash.
b. Cash management involves the efficient collection and disbursement of cash.
c. Cash management involves the efficient processing, collection, and depositing of
cash.
d. None of these
11. Collection float is the ...
a. total time between the mailing of the check by the customer and the availability
of cash to the receiving firm
b. time consumed in clearing the check through the banking system
c. time the check is in the mail
d. time during which the check received by the firm remains uncollected
12. Deposit float is the .
a. total time between the mailing of the check by the customer and the availability
of cash to the receiving firm
b. time consumed in clearing the check through the banking system
Portfolio Management
portfolio manager
managing money
None of these
16. refers to managing an individuals investments in the form of bonds, shares, cash, mutual
funds etc
a.
b.
c.
d.
Portfolio management
portfolio manager
managing money
None of these
17. Mutual fund is an important segment of the financial system. It is non-fund based special type of
institution which acts as an investment conduit.
a. True
b. False
18. A hedge fund pursuing a .strategy is attempting to exploit temporary
misalignments in relative pricing.
a. directional
b. non-directional
c. stock or bond
19. The mobilization of funds and the number of players operating in the industry reached new heights as
investors started showing more interest in mutual funds.
a. True
b. False
20. Hedge funds are typically set up as .. and provide .. information about
portfolio composition and strategy to their investors.
a.
b.
c.
d.
2.(a)
3.(a)
4.(c)
5.(d)
6. (a)
7.(c)
8.(b)
9.(b)
10.(c)
11. (a)
12.(d)
13.(b)
14.(b)
15.(b)
16. (a)
17.(a)
18.(b)
19.(a)
20.(a)
1. Which of the following definitions explains what is meant by the corporate parent?
a.
b.
c.
d.
2. The naive rule used to choose national portfolios was to invest equal amounts in each stock,
creating a type of market portfolio.
a. True
b. False
3. The global-local dilemma in international strategy means:
a. How many local people to employ in foreign subsidiaries.
b. The extent to which products and services may be standardized across national
boundaries or need to be adapted to meet the requirements of specific national
markets.
c. Whether to centralize strategic decisions in head office or to devolve decisionmaking to subsidiaries.
d. The issues related to globalization and the alleged disadvantaging of developing
countries.
4. In terms of the corporate rationales of multi-business corporations, the synergy manager
seeks to add value by:
a. Becoming adept at employing its own corporate competences to add value to its
businesses.
b. Enhancing value across business units by managing synergies across business
units.
c. By developing ideas for how businesses can share activities and processes.
d. All of the above.
5. An investor whose risk-free rate did not exceed 1.5% per quarter would prefer the return risk
mix of the four-country portfolio.
a. True
b. False
6. The two generic international strategies are:
a.
b.
c.
d.
7. The industry is not dominated by the institutional investors. Like hundreds of mutual funds,
there are a number of asset management companies in India as well.
a. True
b. False
8. Which of the following best describes the relationship between the nature of diversification of
a firm and the financial performance of that firm?
a. The more unrelated a firms portfolio, the higher the financial performance.
b. The less diversified the portfolio the higher the financial performance.
c. Related and limitedly diversified companies perform better on average than both
undiversified and heavily diversified companies.
d. There is no relationship.
9. In assessing the corporate portfolio it is important to evaluate the following:
a. Core competences, unique resources, threshold competences and threshold
resources.
b. Vertical integration, horizontal integration and backwards integration.
c. Product range, service range and geographical spread.
d. Balance, attractiveness and fit.
10. The four segments of the Ashridge Portfolio Display (parenting matrix) are:
a.
b.
c.
d.
True
False
14. An investment designed to explore a new and evolving product or service is known
as
a.
b.
c.
d.
Transformative Investments
Venture Investments
Value Investments
None of these
15. The Indian asset management industry has seen a steady asset growth over the past few
years, though there certainly have been some rough patches.
a. True
b. False
16. In terms of the corporate rationales of multibusiness corporations, a portfolio manager seeks
to add value by:
a. Seeking to manage a portfolio of businesses to achieve synergies between them.
b. By managing its constituent businesses by means of the growth share (or BCG)
matrix.
c. By acting as an agent on behalf of financial markets and shareholders.
d. By employing their own corporate competences to add value to business units.
17. The performances of the expost efficient portfolios dominate all single-country portfolios.
a. True
b. False
18. In terms of the corporate rationales of multi-business corporations the parental developer
seeks to add value by:
a. Developing good relationships with shareholders and investors.
b. Seeking to employ its own competences as a corporate parent to add value to its
businesses.
c. Managing synergies across business units.
d. By taking direct control of the strategic development of its businesses.
19. What are the three main criteria used for portfolio analysis?
a.
b.
c.
d.
20. In purchasing the house, he has not an explicit range of liability choices in the form of
mortgage terms and amount.
a. True
b. False
2.(a)
3.(b)
4.(d)
5.(a)
6. (a)
7.(b)
8.(c)
9.(d)
10.(c)
11. (c)
12.(c)
13.(a)
14.(b)
15.(a)
16. (c)
17.(a)
18.(b)
19.(a)
20.(b)
1. Which of the following is not a test of the semi strong form of the EMT?
a.
b.
c.
d.
event anomalies
seasonal anomalies
firm anomalies
accounting anomalies
Volatility effect
Value Line rating changes
Closed-end mutual fund discounts
Market-to-book ratio
5. Arbitrage Pricing Theory (APT) is a factor model that was developed by Stephen
Ross. It starts with the assumption.
a. True
b. False
6. The weak form of the EMT contradicts:
a. fundamental analysis, but supports technical analysis as valid
b. technical analysis, but supports technical analysis as valid
c. both fundamental analysis and technical analysis
9. A finding that .would provide evidence against the semi strong form of the EMT.
a.
b.
c.
d.
10. A finding that . would provide evidence against the weak form of the EMT.
a.
b.
c.
d.
11. The banking industry has traditionally believed that credit risk management is primarily
about minimizing loss.
a. True
b. False
12. The new product strategy of a firm is:
a.
b.
c.
d.
13. The application of portfolio planning techniques to a firm's product platforms can lead to:
a.
b.
c.
d.
14. The external environment constrains what can be done by a firm because of:
a.
b.
c.
d.
15. As consumer expectations change a consequence of this for product positioning is that:
a.
b.
c.
d.
What was once an additional extra feature can quickly become a standard feature
All of the above
There are usually many opportunities to add features and services to a product
Competitors compete to introduce new expectations
17. The ..is a model to explain why capital assets are priced the way they are.
a.
b.
c.
d.
Assumptions of CAPM
Capital Asset Pricing Model (CAPM)
Market Portfolio
None of these
2.(c)
3.(d)
4.(a)
5.(a)
6. (d)
7.(d)
8.(c)
9.(c)
10.(b)
11. (a)
12.(d)
13.(b)
14.(d)
15.(a)
16. (a)
17.(b)
18.(a)
19.(a)
20.(a)