Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.

Related MCQs

• Which of the following statements is/are not correct with respect to the ‘Constant Mix Strategies’ of asset allocation? I. Investors adopting these strategies tend to maintain an exposure to stocks that are in constant proportion of their wealth. II. The risk-tolerance level of the investors varies proportionately with the level of theirwealth. III. Reversals in stock markets oppose constant mix strategies over the buy and hold IV. strategies.
• Investors who completely ignore an asset’s variance and only consider the asset’s expected return are called:
• If investors do not know their investment horizons for certain
• One of the assumptions of the CAPM is that investors exhibit myopic behavior. What does this mean?
• Because most investors are risk averse
• Under ________ EMH investors cannot earn abnormal/superior profits on securities on a consistent basis.
• Wealthy investors may prefer the favorable tax treatment of investments such as
• Standard deviation and beta both measure risk, but they are different in that
• Merrill Lynch estimates the index model for a stock using regression analysis involving total returns. They estimated the intercept in the regression equation at 6% and the β at 0.5. The risk-free rate of return is 12%. The true β of the stock is ________.
• On November 22, 2009 the stock price of WalMart was $39.50 and the retailer stock index was 600.30. On November 25, 2009 the stock price of WalMart was $40.25 and the retailer stock index was 605.20. Consider the ratio of WalMart to the retailer index on November 22 and November 25. WalMart is _______ the retail industry and technical analysts who follow relative strength would advise _______ the stock.