McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Business Administration (MBA) .
Chapters
| 51. |
An efficient market reflects: |
| A. | past, current and inferred information. |
| B. | future information. |
| C. | past and current information. |
| D. | current and inferred information. |
| Answer» A. past, current and inferred information. | |
| 52. |
In which form of the efficient market hypothesis do security prices reflect only past stock price and volume information? |
| A. | weak form. |
| B. | semistrong form. |
| C. | strong form. |
| D. | none of the above. |
| Answer» B. semistrong form. | |
| 53. |
Which of the following is not a test of semi-strong form efficiency? |
| A. | stock splits. |
| B. | accounting changes. |
| C. | dividend announcements. |
| D. | insider transactions. |
| Answer» D. insider transactions. | |
| 54. |
An efficient market does not require that: |
| A. | stock prices incorporate all information. |
| B. | all known information be reflected in prices. |
| C. | the adjustments occur very quickly. |
| D. | each adjustment be perfect. |
| Answer» D. each adjustment be perfect. | |
| 55. |
"Filter rules" do not tend to be profitable because of: |
| A. | transaction costs. |
| B. | market volatility. |
| C. | trends in stock prices. |
| D. | the fact that no rules outperform a buy-and-hold strategy, even for short periods. |
| Answer» A. transaction costs. | |
| 56. |
The random walk hypothesis posits that: |
| A. | historical returns follow a random walk. |
| B. | historical prices follow a random walk. |
| C. | firm size follows a random walk. |
| D. | short-run investment returns are inherently unpredictable. |
| Answer» D. short-run investment returns are inherently unpredictable. | |
| 57. |
Positive abnormal returns for corporate insiders constitute a violation of: |
| A. | weak form efficiency. |
| B. | semi-strong form efficiency. |
| C. | strong-form efficiency. |
| D. | none of these. |
| Answer» C. strong-form efficiency. | |
| 58. |
On the day following big "up days," the DJIA tends to: |
| A. | rise substantially. |
| B. | fall precipitously. |
| C. | rise moderately. |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 59. |
Stock market value can deviate from its fundamental value because of strong: |
| A. | earnings news. |
| B. | investor mood. |
| C. | semi-strong form efficiency. |
| D. | data-snooping. |
| Answer» B. investor mood. | |
| 60. |
Stock fraud perpetrators sometimes dupe respected community (or group) leaders and these leaders unwittingly cause community members to be victimized too. This scheme is called: |
| A. | leader-led fraud. |
| B. | a cold call. |
| C. | affinity fra |
| Answer» C. affinity fra | |
| 61. |
___________ market encompasses all securities not traded on national organized exchanges. |
| A. | Primary |
| B. | Money |
| C. | Capital |
| D. | Over the counter |
| Answer» D. Over the counter | |
| 62. |
Which of the following is not a part of systematic risk |
| A. | Economic changes |
| B. | Management capability |
| C. | Political changes |
| D. | Sociological changes |
| Answer» B. Management capability | |
| 63. |
Primarily Inflation gives rise to |
| A. | Market risk |
| B. | Purchasing power risk |
| C. | Business risk |
| D. | Financial risk |
| Answer» B. Purchasing power risk | |
| 64. |
Unsystematic risk is known as |
| A. | Non diversifiable risk |
| B. | Total risk |
| C. | Market risk |
| D. | Diversifiable risk |
| Answer» D. Diversifiable risk | |
| 65. |
characteristic line is associated with |
| A. | Standard deviation |
| B. | Beta |
| C. | Variance |
| D. | Portfolio |
| Answer» B. Beta | |
| 66. |
Graphical presentation of CAPM is known as |
| A. | Capital asset line |
| B. | Pricing line |
| C. | Assets pricing line |
| D. | Security market line |
| Answer» D. Security market line | |
| 67. |
__________ is defined as the nth root of the product resulting from multiplying a series of returns together. |
| A. | Arithmetic mean |
| B. | Geometric mean |
| C. | Harmonic mean |
| D. | None of the above |
| Answer» B. Geometric mean | |
| 68. |
An order to buy or sell at the most advantageous price obtainable after the order is represented in the trading crowd. |
| A. | Scale order |
| B. | Sell ‘plus’ order |
| C. | Market order |
| D. | Day order. |
| Answer» C. Market order | |
| 69. |
__________ refers to capitalize on downward movement in stock prices. |
| A. | Long selling |
| B. | small selling |
| C. | Large selling |
| D. | Short selling |
| Answer» D. Short selling | |
| 70. |
___________ is a device to overcome the uncertainty connected with a stop order. |
| A. | Stop limit order |
| B. | Stay limit order |
| C. | Halt limit order |
| D. | End limit order |
| Answer» A. Stop limit order | |
| 71. |
___________ is a function of the operating conditions faced by a firm and the variability these conditions inject into operating income and expected dividends. |
| A. | Market risk |
| B. | Business risk |
| C. | Interest rate risk |
| D. | Systematic risk |
| Answer» D. Systematic risk | |
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