试卷详情
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权益证券投资:证券市场
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[单项选择]Which of the following is NOT a service provided by an underwriter in the primary market()
A. Origination.
B. Risk Bearing.
C. Diversification.
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[单项选择]Which of the following is NOT an assumption behind efficient capital markets()
A. New information occurs randomly, and the timing of announcements is independent of one another.
B. Market participants correctly adjust prices to reflect new information.
C. Return expectations implicitly include risk.
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[单项选择]Which of the following statements regarding capital market efficiency is TRUE()
A. Study results generally do not support the strong form of the efficient market hypothesis.
B. Event studies and time series tests provide evidence that markets do not tend to be semistrong form efficient.
C. Corporate insiders and stock exchange specialists have monopolistic access to information that can be used to obtain positive abnormal returns.
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[单项选择]The reasons why a mispricing can persist all relate to the idea that:()
A. taxes and other transactions costs make exploiting the anomaly prohibitive.
B. the size of the available profit is too small.
C. an anomaly cannot be quickly exploited by traders or arbitrageurs.
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[单项选择]The opportunity to take advantage of the downward pressure on stock prices that result from end-of-the-year tax selling is known as the:()
A. January anomaly.
B. December anomaly.
C. end-of-the-year effect.
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[单项选择]Assume you purchased 1500 shares of a stock on margin at $34 per share. The initial margin rate is 40%, and the minimum maintenance margin is 25%. Assume no dividends, commissions, or margin interest. Below what stock price would you receive a margin call()
A. $18.13.
B. $27.20.
C. $30.31.
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[单项选择]Cross-sectional returns studies contend that:()
A. all securities should have equal risk-adjusted returns because security prices should reflect all public information that would influence the security’s risk.
B. all securities should have equal risk-adjusted returns because security prices should not reflect all public information that would influence the security’s risk.
C. securities should not have equal risk-adjusted returns because security prices should not reflect all public information that would influence the security’s risk.
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[单项选择]Which of the following regarding bond market indexes is FALSE()
A. There are more bond issues than stocks.
B. The price volatility of bonds is constantly changing due to the influence of maturity and market yield on bond durations.
C. The bond universe is more stable than the stock universe.
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[单项选择]Which of the following actions is most likely to give an analyst superior results7()
A. The ability to react very quickly to public announcements.
B. Having superior abilities to identify patterns of returns based on historical data of economic factors and being able to determine the relationship between a stock return and certain economic factors based on historical data and then use that relationship to make reliable forecasts for future price movements.
C. A strong ability to interpret and estimate the future impact of publicly available information.
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[单项选择]Assume a stock index consists of many firms who have recently split their stock. Which of the following weighting schemes will see a bias due to the impact of stock splits()
A. Unweighted price series.
B. Standard and Poor's 500 Index.
C. Price-weighted series.
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[单项选择]Bond market indexes are generally more difficult to create than stock indexes for all of the following reasons except:()
A. the small number of bond issues relative to stocks.
B. the routine maturity and call provisions of bonds.
C. the difficulty in establishing market prices for many bonds.
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[单项选择]The implication of efficient capital markets and a lack of superior analysts have led to the introduction of:()
A. futures options.
B. index funds.
C. balanced funds.
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[单项选择]Corp. stock at a price of $60 per share. Kirk wishes to buy on margin. Assuming the margin requirement is 40 percent, how much money does Kirk have to pay up front to make the purchase()
A. $36000.
B. $24000.
C. $0.
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[单项选择]Which of the following statements about the maintenance margin requirement is FALSE( )
A. The purpose of the maintenance margin requirement is to protect the broker in the event of a large stock decline.
B. The Federal Reserve sets the maximum maintenance margin.
C. Generally the maintenance margin requirement is lower than the initial margin requirement.
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[单项选择]The recent creation of indexes tracking both stocks and bonds provides better benchmarking information for which of the following portfolios( )
A. sector index funds.
B. the typical stock mutual fund.
C. investment funds broadly diversified across asset classes.
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[单项选择]The use of interest rates to forecast future stock prices is ruled out by which form of market efficiency()
A. weak form.
B. semi-strong form.
C. C. both A and
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[单项选择]Helen Alba and Kobin Lubis have deferring views on the future performance of U-Cite. Consequently, Alba has taken a short position while Lubis has purchased the stock on margin. The relevant details are as follows: Market price per share: $42 Number of shares purchased: 1000 Holding period: 1 year Ending share price: $50 Initial margin requirement: 45% Maintenance margin: 30% Transaction and borrowing cost: $0 Alba and Lubis will receive margin calls at a stock price of: Alba Lubis( )①A. $37.66 $53.45 ②B. $46.85 $53.45 ③C. $46.85 $33.00
A. ①
B. ②
C. ③
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[单项选择]Whichofthefollowingstatementsabout"shortselling"isTRUE()
A. A short position may be hedged by purchasing put options.
B. Short sellers may be subject to margin calls if the stock price increases.
C. Stocks that pay large dividends should be sold short before the ex-dividend date and bought afterward to take advantage of the large price decline in a short time period.
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[单项选择]An index was recently begun with the following two stocks: Company A -50 shares valued at $ 2 each. Company B - 10 shares valued at $10 each. Given that the value-weighted index was originally set at 100 and Company A’s stock is currently selling for $ 4 per share while Company B’s stock is still at $10 per share, what is the current value of the price-weighted index and the value-weighted index Price -weighted Value -weighted()①A. 7 300 ②B. 8 150 ③C. 7 150
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements about the efficient market hypothesis is FALSE( )
A. Exchange specialists derive above-average returns from private information.
B. Runs tests are used to test the weak form of the efficient markets hypothesis.
C. Efficient markets tests have found that professional money managers, as a group, have consistently outperformed the market.
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[单项选择]Given that markets are efficient, which of the following is least likely to cause an actively managed mutual fund to underperform an index fund()
A. Taxes.
B. Inferior stock selection.
C. Management expenses.
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[单项选择]Which category of tests assumes that, in an efficient market, securities lie on the security market line()
A. Event studies.
B. Cross-sectional tests.
C. Time-series tests.
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[单项选择]Which of the following statements about bond and stock market indexes is FALSE( )
A. Bond market indexes have been in existence virtually as long as the major stock indexes such as the Dow Jones Industrial Average (DJIA).
B. A small number of very large firms can dominate a value-weighted index.
C. When a company splits its stock, it loses weight in a price-weighted index.
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[单项选择]Which of the following are examples of tests used to examine the statistical independence of past returns()
A. Runs tests.
B. Excess Return tests.
C. Event study tests.
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[单项选择]Which of the following statements is INCORRECT()
A. The strong-form EMH assumes cost free availability of all information, both public and private.
B. The weak-form EMH suggests that fundamental analysis will not provide excess returns while the semi-strong form suggests that technical analysis cannot achieve excess returns.
C. The semi-strong form EMH addresses market and non-market public information.
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[单项选择]Tests of trading rules based on available market data are tests of which form of the efficient markets hypothesis (EMH)()
A. Strong-form.
B. Semistrong-form.
C. Weak-form.
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[单项选择]Consider the following information: Assume an investor acquires 300 shares of a $ 40 stock for a total cost of $12000. There is a 50% initial margin requirement. If the stock price increases to $50 a share, the equity is:()
A. 60%.
B. 70%.
C. 80%.
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[单项选择]Which of the following indexes is a price weighted index()
A. The New York Stock Exchange Index.
B. The Tokyo Stock Exchange Index.
C. The Nikkei Dow Index.
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[单项选择]Which of the following statements about the assumptions of efficient capital markets and the conclusion of the efficient market hypothesis is FALSE()
A. If markets are efficient, investors should not trade often.
B. In testing for semistrong-form market efficiency, researchers typically adjust for the stock’s risk.
C. Tests of market efficiency have found no strategy that produces excess returns above the market after accounting for transaction costs.
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[单项选择]If the market prices of each of the 30 stocks in the Dow Jones Industrial Average (DJIA) all change by the same percentage amount during a given day, which stock will have the greatest impact on the DJIA()
A. The one whose stock trades at the highest dollar price per share.
B. The one whose total equity has the highest market value.
C. The one having the greatest amount of equity in its capital structure.
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[单项选择]The DJIA is a biased measure and has been criticized. Which of the statements below regarding the bias and criticisms of a price-weighted series is false( )
A. Because it is price weighted, when companies have a stock split, their prices decline, and therefore their weight in the DJIA is reduced.
B. The weighting scheme causes a downward bias in the DJIA, because the stocks that have higher growth rates will have higher prices.
C. Because the series is price weighted, a high-priced stock carries more weight than a low priced stock.
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[单项选择]The initial margin is the:()
A. minimum amount of funds that must be supplied when purchasing a security on margin.
B. amount of liquidity that must be maintained in a margin account.
C. amount of cash that an investor must maintain in his/her margin account.
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[单项选择]June Rutherford is preparing a research report on Andronicus Fund, an offshore hedge fund that specializes in identifying market pricing inefficiencies and profiting from the arbitrage opportunities they present. Rutherford includes these statements in her report: Statement 1: The rate of return that investors require from Andronicus should reflect the risk that the fund managers will not consistently capture positive abnormal returns from the anomalies they have identified. Statement 2: Arbitrage trading is unlikely to bring about fully efficient prices because Andronicus and other arbitrageurs will not trade if the gains to be captured are less than their transactions costs. Are Rutherford’s statements correct Statement 1 Statement 2()①A. Correct Correct ②B. Correct Incorrect ③C. Incorrect Correct
A. ①
B. ②
C. ③
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[单项选择]According to the characteristics of the capital market, which of the following is most directly a function of primary capital markets and which is most directly a function of secondary capital markets Primary capital markets Secondary Capital markets()①A. Source of liquidity Security underwriting ②B. Source of new capital Source of price information ③C. Source of price information Source of new capital
A. ①
B. ②
C. ③
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[单项选择]Banz and Reinganum found that small firms consistently outperformed large finns. This anomaly is referred to as the:()
A. growth effect.
B. P/E effect.
C. size effect.
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[单项选择]Assume 100 shares purchased at $75/share with an initial margin of 50 percent. The initial cost to the investor is:()
A. $0.
B. $3750.
C. $7500.
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[单项选择]Which of the following would provide evidence against the semi-strong form of the efficient market theory()
A. Low P/E stocks tend to have positive abnormal returns over the long run.
B. Trend analysis is worthless in determining stock prices.
C. All investors have learned to exploit signals related to future performance.
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[单项选择]Tamber Benz, CFA, recently joined Bay Area Investment Group as a personal financial planner. Today, she has a meeting with a client interested in equity index funds, with a particular interest in learning about the source and direction of biases. In preparation for this meeting, she makes some quick notes (relying on her memory). These notes are listed below. She then finds her well-worn CFA study notes and checks her memory. After reviewing her notes, which of the following choices does she determine is least accurate()
A. An index such as the Valueline Composite Average is constructed by purchasing an equal number of shares of each stock in the index, and will have a downward bias when geometric averaging is used to compute the return.
B. One problem with an index such as the S&P 500 is that firms with greater market capitalization have more impact than other firms.
C. A market value-weighted index, such as the New York Stock Exchange Index, accurately reflects the impact of price changes on wealth.
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[单项选择]Which form (s) of the efficient market hypothesis (EMH) is/are tested by measuring a security's excess returns with respect to market returns while considering the security's market risk()
A. Weak-form.
B. Semi-strong form.
C. Strong-form.
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[单项选择]Documented market anomalies include all of the following EXCEPT:()
A. the greater the ratio of book value/market value, the greater the risk-adjusted rate of return.
B. low P/E ratio stocks experience superior results to the market.
C. the ability for an investor to profit by buying stocks on Friday and selling them on Monday.
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[单项选择]The tendency to commit additional funds to a position that has decreased in value is known in behavioral finance as:()
A. overconfidence bias.
B. confirmation bias.
C. escalation bias.
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[单项选择]Which of the following statements about trading shares of stock or market efficiency is FALSE()
A. Maintenance margin is the required percentage of an investor’s equity compared to the total value of the stock after the investor trades on margin.
B. The up tick rule requires that the last trade in the security be at a price higher than the previous trade.
C. External efficiency means prices adjust rapidly to new information.
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[单项选择]The characteristic of a regional exchange is such that:()
A. it competes with and supplements the national exchanges by providing primary markets for the stocks of smaller companies.
B. it competes with and supplements the national exchanges by providing secondary markets for the stocks of smaller companies .
C. it competes with and supplements the national exchanges by providing primary markets for the stocks of larger companies.
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[单项选择]When using margin to invest in equities, which of the following defines initial margin and what level will the margin be brought back to in the event of a margin call Initial margin Margin call action()①A. amount of borrowed funds in the transactions a deposit must be made to bring the margin back to the initial margin ②B. amount of borrowed funds in the transactions a deposit must be made to bring the margin back to the maintenance margin ③C. minimum amount of equity required of the investor a deposit must be made to bring the margin back to the maintenance margin
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements concerning the persistence of pricing anomalies is least likely to be correct()
A. Arbitrageurs may exploit opportunities down to the point where the remaining mispricing is approximately equal to transactions costs.
B. If the shares of an IPO cannot be shorted, mispricing may be difficult to exploit.
C. Small profit opportunities are difficult to exploit in the absence of derivative securities.
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[单项选择]Which of the following efficient markets studies suggests that securities markets are semistrong-form efficient()
A. Small-firm effect.
B. Short-term stock splits.
C. Neglected-firm effect.
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[单项选择]Toby Jensen originally purchased 400 shares of CSC stock on margin at a price of $60 per share. The initial margin requirement is 50 percent and the maintenance margin is 25 percent. CSC stock price has fallen dramatically in recent months and it closed today with a sharp decline bringing the closing price to $ 40 per share. Will Jensen receive a margin call()
A. Yes, he does not meet the minimum maintenance margin requirement.
B. Yes, he does not meet the minimum initial margin requirement.
C. No, he meets the minimum maintenance margin requirement.
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[单项选择]Byron Campbell purchased 300 shares of Crescent, Inc. , stock at a price of $80 per share. The purchase was made on margin with an initial margin requirement of 50 percent. Assuming the maintenance margin is 25 percent, the stock price of Crescent, Inc. has to fall below what level for Campbell to receive a margin call()
A. $40.00.
B. $30.00.
C. $53.33.
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[单项选择]Which of the following statements about bonds, indexes, markets, and market efficiency is FALSE()
A. A price-weighted index assumes the investor holds an equal number of shares of the stocks in the index.
B. Tests of market efficiency find that stock exchange specialists derive above-average returns.
C. The bulk of all bond trading takes place on organized exchanges.
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[单项选择]The January Anomaly, the neglected firm effect, and the book value/market value ratio are studies examining which form of the EMH()
A. Weak-form of the EMH.
B. Strong-form of the EMH.
C. Semistrong-form of the EMH.
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[单项选择]Which of the following statements regarding regulations governing the short-sale process is FALSE ()
A. The short seller must pay a margin equivalent to the prevailing margin requirement when the transaction is made.
B. If dividends are paid on the stock during the short-sale transaction, the short seller must pay dividends to the investor that loaned the stock.
C. The short-sale process must be completed within a 90-day period.
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[单项选择]Which of the following statements regarding secondary markets is FALSE Secondary markets are important because they provide:()
A. investors with continuous information.
B. firms with greater access to external capital.
C. regulators with information about market participants.
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[单项选择]A stock’s abnormal rate of return is defined as the:()
A. expected risk-adjusted rate of return minus the market rate of return.
B. actual rate of return less the expected risk-adjusted rate of return.
C. the market rate of return less the actual rate of return.
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[单项选择]The efficient market hypothesis implies that fundamental analysis:()
A. can achieve superior returns by extrapolating historical data.
B. will be successful if transaction costs are minimized by focusing on a limited number of large-capitalization stocks.
C. requires the analyst to predict movements in relevant variables that affect rates of return.
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[单项选择]An investor sold a stock short and is worried about rising prices. To protect himself from rising prices he would place a:()
A. stop order to sell.
B. limit order to sell.
C. stop order to buy.
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[单项选择]Which of the following statement about market is FALSE()
A. Over-the-counter-market is called a continuous market.
B. Dealer-markets are price driven markets.
C. If trades occur at any time the market is open, it is called continuous market.
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[单项选择]Which of the following sets of indexes are price-weighted()
A. Dow Jones World Stock Index and Russell Index.
B. Morgan Stanley Capital International Index and S&P 500 Index.
C. Dow Jones Industrial Average and Nikkei Dow Jones Stock Market Average.
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[单项选择]Fundamental analysis studies indicate that:()
A. the bottom up approach to analysis will not yield superior results if the analysis only looks at past and current information.
B. the top down approach to analysis will not yield superior results if the analysis only looks at past and current information.
C. the top down approach to analysis will not yield superior results if the analysis looks at past, current and future information.
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[单项选择]Which of the following statements regarding primary and secondary markets is FALSE( )
A. Secondary market transactions occur between two investors and do not involve the firm that originally issued the security.
B. New issues of government securities can be sold on the primary market.
C. Prevailing market prices are determined by primary market transactions and are used in pricing new issues.
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[单项选择]Which of the following tests are NOT used to examine the weak form of the efficient market hypothesis Those that examine:()
A. whether security returns are independent over time.
B. a security’s return relative to the market return.
C. whether excess returns can be obtained from using mechanical trading rules.
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[单项选择]The most appropriate reason for an investor to sell a security short is the investor’s belief that, in the near future.()
A. the security’s price will decline.
B. interest rates will decline.
C. The required rate of return on the security will decline.
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[单项选择]Lynne Hampton purchased 100 shares of $75 stock on margin. The margin requirement set by the Federal Reserve Board was 40 percent, but Hampton’s brokerage firm requires a total margin of 50 percent. Currently the stock is selling at $62 per share. What is Hampton’s return on investment before commission and interest if she sells the stock now()
A. -17%.
B. -35%.
C. -40%.
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[单项选择]Assuming that markets are efficient, which of the following statements is FALSE()
A. Markets will not be volatile.
B. Investors should not trade often.
C. Investors should buy and hold passively managed index funds.
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[单项选择]Which of the following statements describes the overall conclusions regarding the weak-form of the efficient market hypothesis (EMH)()
A. All evidence indicates that simple trading rules generate positive abnormal returns.
B. Stock exchange specialists using monopolistic information contained in the limit order book derive above average returns.
C. Most evidence indicates that after incorporating trading costs, simple trading rules do not generate positive abnormal profits.
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[单项选择]The semi-strong form of the efficient market hypothesis (EMH) asserts that stock prices:()
A. fully reflect all historical price information.
B. fully reflect all relevant information including insider information.
C. fully reflect all publicly available information.
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[单项选择]Which of the following statements about selling shares of stock is FALSE()
A. The "depth" of the market is typically defined as the number of traders willing to trade at prices above and below the current price.
B. If the initial margin requirement is 50% and the maintenance margin requirement is 25%, the investor who buys a stock at $26 on margin will receive a margin call when the stock hits $17.33.
C. Initial public offerings are sold in the secondary market.
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[单项选择]Which of the following statements about the implications of tests for the efficient market hypothesis (EMH) is least accurate()
A. By purchasing an index fund, an investor can match the market return and minimize costs.
B. Other than corporate insiders and market specialists, most traders have monopolistic access to information, which rejects the strong-form EMH.
C. The best way to measure the performance of investments professionals is against a randomly selected buy-hold strategy of stocks (assuming the same risk level).
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[单项选择]In a value-weighted index firms with:()
A. larger market caps have lesser impacts on the index.
B. greater market caps have greater impacts on the index.
C. higher stock prices have greater impacts on the index.
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[单项选择]Which of the following statement about weighting schemes used in constructing stock market indexes is FALSE()
A. The Nikkei Dow is a price-weighted index.
B. The Standards and Poor’s indexes are market value-weighted indexes.
C. A market-weighted index automatically adjusts for stock splits.
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[单项选择]An investor buys 200 shares of ABC at the market price of $100 on full margin. The initial margin requirement is 40 percent and the maintenance margin requirement is 25 percent. If the shares of stock later sold for $ 200 per share, what is the rate of return on the margin transaction()
A. 250%.
B. 100%.
C. 200%.
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[单项选择]Uniter Enterprises wants to repurchase some outstanding shares. Which of the following methods gives them the maximum flexibility and most likely helps to support the price of the shares()
A. Buying shares back in the open market.
B. Buying back a fixed number of shares at a fixed price.
C. Announcing a tender offer for the desired number of shares.
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[单项选择]The level of diversification benefits available from investing internationally is determined by the:()
A. relative returns between markets.
B. correlations between market returns.
C. standard deviations of the returns.
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[单项选择]Which of the following groups of stocks do NOT tend to show above average returns over time()
A. Stocks with low Book Value to Market Value (BV/MV).
B. Neglected stocks.
C. Small stocks.
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[单项选择]An order to buy or sell a stock at the best current price is a:()
A. limit order.
B. floor order.
C. market order.
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[单项选择]With respect to behavioral finance, the tendency to place too much faith in an earnings forecast is known as:()
A. confirmation bias.
B. overconfidence bias.
C. escalation bias.
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[单项选择]What are the three basic categories of bond indexes()
A. Corporate; government; municipal.
B. Investment grade; high yield; global.
C. Manufacturing; service; technological.
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[单项选择]Which of the following statements best describes the investment assumption used to calculate an unweighted price indicator series()
A. An equal dollar investment is made in each stock in the index.
B. A proportionate market value investment is made for each stock in the index.
C. A proportionate market capitalization is made for each stock in the index.
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[单项选择]The performance of professional money managers taken as a whole has been:()
A. below average.
B. above average.
C. better than a simple buy and hold strategy.
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[单项选择]If statistical tests of stock returns over time support the efficient market hypothesis, the resulting correlations should be:()
A. lagged.
B. negative.
C. zero.
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[单项选择]An investor purchases 200 shares of Merxx on margin. The shares are trading at $40. Initial and maintenance margins are 50 percent and 25 percent. If the investor sells the stock when the price rises to $50 at year-end, the return on the investment would be closest to:()
A. 50.00%.
B. 18.75%.
C. 25.00%.
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[单项选择]The Dow Jones Industrial Average accounts for stock splits by:()
A. multiplying the index by the stock split ratio.
B. reducing the market capitalization of the stock experiencing the split.
C. increasing the weighting of the stock experiencing the split.
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[单项选择]Many academics claim that a particular anomaly's results reflect the inability of the asset pricing model to provide a complete measure of risk. Which of the following anomalies are the academics discussing()
A. The size effect.
B. Stock splits.
C. The neglected firm effect.
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[单项选择]If a firm announces an unexpectedly large cash dividend, the efficient market hypothesis (EMH) would predict which of the following price changes at the announcement()
A. An abnormal price change to occur before the announcement.
B. An abnormal price change to occur at the time of the announcement.
C. A gradual price change to occur for several weeks after the announcement.
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[单项选择]An analyst gathered the following data about stocks J, K and L, which together form a value-weighted index:()
A. 4.2
B. 132.1
C. 106.80
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[单项选择]According to EMH knowledge, is the information set associated with the weak-form of the EMH best described as including all information associated with the: semistrong-form of the EMH strong-form of the EMH()①A. No No ②B. No Yes ③C. Yes No
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements does NOT describe the role of a portfolio manager in perfectly efficient markets Portfolio managers should:()
A. construct diversified portfolios that include international securities to eliminate unsystematic risk.
B. quantify client’s risk tolerance, communicate portfolio policies and strategies, and maintain a strict buy and hold policy avoiding any changes in the portfolio to minimize transaction costs.
C. help clients minimize taxes and reduce trading turnover.
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[单项选择]The direct exchange of securities between investors without using an intermediary or the services of a broker occurs in which of the following markets()
A. The third market.
B. The fourth market.
C. The over-the-counter market.
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[单项选择]What is the price-weighted index of the following three stocks()
A. 65.
B. 45
C. 35
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[单项选择]Using the following assumptions, calculate the rate of return on a margin transaction for an investor who purchases the stock and the stock price at which the investor who shorts the stock will receive a margin call. Market Price Per Share: $25 Number of Shares Purchased: 1000 Holding Period: 1 year Ending Share Price: $22 Initial Margin Requirement: 50% Maintenance margin: 25% Transaction and borrowing costs: $0 The company pays no dividends What of the following choices is closest to the correct answer The margin transaction return and margin call are: Margin Transaction Return Margin Call()①A. -24.00% $16.67 ②B. -12.00% $16.67 ③C. -24.00% $30.00
A. ①
B. ②
C. ③
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[单项选择]In calculating the Standard & Poor's stock price indices, the adjustment for stock splits occurs:()
A. by adjusting the divisor.
B. automatically, due to the manner in which the index is calculated.
C. by adjusting the numerator.
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[单项选择]Which of the following conclusions about the semi-strong form of the efficient market hypothesis (EMH) and the strong-form EMH is FALSE()
A. If the strong form of market efficiency were true, there would be no need for insider trading laws.
B. Neglected firms (i. e. those firms with a small number of analysts following them) tend to underperform the market.
C. Professional money managers, as a group, have not been able to produce returns that consistently exceed the market.
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[单项选择]James Investments is calculating an unweighted (equally-weighted) index on a four stock portfolio. Use the following information to calculate the value of the index using the geometric and arithmetic mean.()
A. 0.25
B. 3.025
C. 1.277
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[单项选择]At a recent seminar on Capital Market Efficiency, David Thorngate, a seasoned arbitrageur wanted to dispel the notion that all arbitrage trades are successful. During his speech, he made the following statements regarding arbitrage and the ability of arbitrageurs to correct market anomalies: Statement 1: There are limits on the ability of arbitrage to bring about efficient prices. Arbitrage is frequently not risk-less. Just because fundamentals indicate that one stock is undervalued or overvalued relative to another does not mean that trading on this information will be profitable. Statement 2: Even in "pairs trading," where an arbitrageur buys the underpriced security and shorts the overpriced security, significant risk from stock-specific factors remains. So, there is no guarantee that even correctly identified relative mispricings of similar stocks will be corrected in the near term. Are Statement 1 and Statement 2 as made by Thorngate correct Statement 1 Statement
A. ①
B. ②
C. ③
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[单项选择]Which of the following does NOT imply an informationally efficient market()
A. Many profit-maximizing participants, each acting independently of the others, analyze and value securities.
B. The timing of one news announcement is independent of other news announcements.
C. A risk-free asset exists, and investors can borrow and lend an unlimited amount at the risk-free rate.
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[单项选择]An investor wishes to short sell 500 shares of McDonald Corporation. The shares open lower at $14.50 and the next five transactions are $14.00, $14.00, $13.50, $14.25, and $14.50. The lowest price at which the order can be executed is:()
A. $14.25.
B. $13.50.
C. $14.00
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[单项选择]Randy Smith called his broker, Pare Durbin, and asked her to borrow 100 shares of Zylex Corp. stock. Randy then sold the stock at the current market price of $45 while anticipating that Durbin would be able to buy the stock back for him at a lower price in the future. What type of order did Smith place()
A. Short sale.
B. Market order.
C. Margin order.
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[单项选择]Which of the following statements regarding margin accounts is TRUE( )
A. A margin call is issued only on short positions.
B. Margin accounts can be used to purchase securities by borrowing part of the purchase price.
C. Margin refers to the amount of funds the investor can borrow.
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[单项选择]Which of the following statements about arbitrage and market anomalies is most accurate()
A. Investors of the funds that arbitrageurs and traders use are generally too patient and fail to remove funds in a timely manner when trades go against them.
B. Arbitrageurs have more capital at their disposal than they require enabling them to pursue any security mispricing.
C. In pairs trading, where an arbitrageur purchases the underpriced security and shorts the overpriced security, stock-specific risk remains.
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[单项选择]In securities exchange markets, a member who executes stop loss or stop buy orders when the specified price occurs is most likely a:()
A. floor broker.
B. market maker.
C. commission broker.
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[单项选择]A composite series of stocks and bonds makes it possible to:()
A. examine the benefits of diversifying with a combination of asset classes such as stocks and bonds in addition to diversifying with the asset classes of stocks or bonds.
B. examine the correlation among the various asset classes of stocks or bonds.
C. examine the benefits of diversifying with a combination of asset classes such as stocks and bonds.
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[单项选择]Which of the following statements about securities markets is least accurate()
A. Characteristics of a well-functioning securities market include: many buyers and sellers willing to trade at below market price, low bid-ask spreads, timely information on price and volume of past transactions, and accurate information on supply and demand.
B. When Conglomerate, InC. trades directly with MultiNational, Ltd. , it is using the fourth market.
C. A limit buy order and a stop buy order are both placed below the current market price.
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[单项选择]Which of the following about a well functioning market is FALSE()
A. numerous buyers and sellers are willing to trade at prices about and below the current price.
B. the current price of a security fully reflects all the information currently available about the security.
C. market participants can buy and sell quickly at a known price.
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[单项选择]Index funds are:()
A. on average underpriced by 15%, but this underpricing varies over time, which supports the EMH.
B. on average overderpriced by 15%, but this overpricing varies over time, which supports the EMH.
C. security portfolios designed to duplicate the composition and therefore the performance of a selected market index series.
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[单项选择]More recent tests of the predictive content in Value Line rankings.()
A. provide additional support for the semi-strong form of the EMH.
B. provide less support for the semi-strong form of the EMH.
C. provide additional support for the weak form of the EMH.
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[单项选择]Which of the following statements about efficient markets and indexes is FALSE()
A. An unweighted index assumes that investors make and maintain an equal dollar investment in each stock in the index.
B. External efficiency means prices adjust rapidly to new information.
C. Efficient markets tests have found that stocks with high price-to-earnings ratios (P/E) tend to outperform stocks with low P/E ratios.
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[单项选择]Capital market efficiency is desirable, but there are limitations in achieving full market efficiency. Which of the following is least likely to be a limitation in achieving full capital market efficiency()
A. Cost of trading.
B. Survivorship bias.
C. Limits of arbitrage.
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[单项选择]With regard to stock market indexes, it is least likely that:()
A. the use of a geometric mean produces a downward bias on an equal-weighted index compared to the use of an arithmetic mean.
B. the use of price weighting versus market value weighting produces a downward bias on the index.
C. a value-weighted index must be adjusted for stock splits but not for dividends.
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[单项选择]The evidence suggests that the correlation of returns between U.S. government bonds and an index of international government bonds is:()
A. between 0.0 and -0.5, and that between indices of U. S. investment grade bonds is between 0.0 and 0.5.
B. between 0.0 and 0.5, and that between indices of U. S. investment grade bonds is close to 1.0.
C. between 0.0 and 0.5, and that between indices of U. S. investment grade bonds is between 0.25 and 0.75.
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[单项选择]Members of the exchange who act as brokers but do not work for a specific brokerage firm are referred to as:()
A. commission brokers.
B. registered brokers.
C. floor brokers.
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[单项选择]Regarding the technical points affecting the short sales of a stock, which of the following statements is TRUE()
A. The short seller must pay all dividends due to the lender of the shorted stock.
B. Stocks can only be shorted in a down market.
C. The lender must also deposit margin money to guarantee the eventual repurchase of the stock.
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[单项选择]Which of the following is least likely a reason that investors should be skeptical of reported market anomalies()
A. Strategy risk.
B. Synchronous trading.
C. Data mining.
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[单项选择]Which of the following statements is most accurate7 A continuous market most likely exists for a stock when:()
A. numerous dealers are willing to make a market in the stock.
B. an overnight buildup of buy and sell orders for the stock occurs.
C. significant new information about the company is released to market participants.