fi 412
Study online at https://quizlet.com/_hycjjk
1. As the required rate of return on an asset increases
I. asset prices decrease because the cash flows decrease
II. asset prices decrease because the present value of cash flow decreases
III. asset prices decrease because there is a negative relationship between
prices and returns: II and III
2. the semi strong form of the efficient mart hypothesis(EMH)specifies that
I. asset prices respond quickly to the release of news
II. asset prices are driven by news about market sentiment
III. asset prices respond fully to the release of the news: I and III
3. An overreaction of an assets price to "bad news" is a violation of: semi strong form
EMH
4. Which of the following are violations of weak-form EMH?
I. a positive correlation of asset returns over time
II. an inability to predict asset price movements
III. asset prices frequently being up on Friday and down on Monday: I and III
5. A corporate CEO who announces accurate details of a merger and acquisition
I. expects a quick and full response to the news
II. is fulfilling his/her responsibility to shareholders
III. expects insiders to make abnormally high returns: I and II only
6. Which of the following are characteristics of money?
I A store of value
II A hedge against inflation
III A unit of account:
7. The APR is 10 and compounding is semi-annual, the effective annual rate is:
8. The cash flows are
Time 0: -$101.29, Time 1: $50, Time 2: $75, Time 3: -$40, Time 4: $35. If the
interest rate is 10% per perio:
9. The cash flows are
Time 0: -$101.29, Time 1: $50, Time 2: $75, Time 3: -$40, Time 4: $35. If the
interest rate is 10% per period:
10. The nominal rate of interest is 7% and the rate of inflation is 2%.
I The real rate of interest is 5%
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Study online at https://quizlet.com/_hycjjk
1. As the required rate of return on an asset increases
I. asset prices decrease because the cash flows decrease
II. asset prices decrease because the present value of cash flow decreases
III. asset prices decrease because there is a negative relationship between
prices and returns: II and III
2. the semi strong form of the efficient mart hypothesis(EMH)specifies that
I. asset prices respond quickly to the release of news
II. asset prices are driven by news about market sentiment
III. asset prices respond fully to the release of the news: I and III
3. An overreaction of an assets price to "bad news" is a violation of: semi strong form
EMH
4. Which of the following are violations of weak-form EMH?
I. a positive correlation of asset returns over time
II. an inability to predict asset price movements
III. asset prices frequently being up on Friday and down on Monday: I and III
5. A corporate CEO who announces accurate details of a merger and acquisition
I. expects a quick and full response to the news
II. is fulfilling his/her responsibility to shareholders
III. expects insiders to make abnormally high returns: I and II only
6. Which of the following are characteristics of money?
I A store of value
II A hedge against inflation
III A unit of account:
7. The APR is 10 and compounding is semi-annual, the effective annual rate is:
8. The cash flows are
Time 0: -$101.29, Time 1: $50, Time 2: $75, Time 3: -$40, Time 4: $35. If the
interest rate is 10% per perio:
9. The cash flows are
Time 0: -$101.29, Time 1: $50, Time 2: $75, Time 3: -$40, Time 4: $35. If the
interest rate is 10% per period:
10. The nominal rate of interest is 7% and the rate of inflation is 2%.
I The real rate of interest is 5%
1/2
