1
FINA 3315 Ch. 9 & 10 Questions with Correct
Answers | Updated (100% Correct Answers)
A type of mutual fund with particular appeal to investors who
accept the efficient market hypothesis is...
A. emerging markets fund.
B. asset allocation fund.
C. index fund.
D. growth opportunities fund. Answer: C. index fund.
When the market rate of interest is higher than a bond's coupon
rate, the bond will sell at a discount. (T/F) Answer: True
The process that quickly eliminates price discrepancies in efficient
markets is known as
A. arbitration.
B. market correction.
C. random fluctuation.
D. arbitrage. Answer: D. arbitrage.
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,2
The tendency of investors to blame others for their failures and take
personal credit for their successes is referred to as...
A. representativeness.
B. loss aversion.
C. narrow framing.
D. self−attribution
bias. Answer: D. self−attribution
bias.
The tendency of naive investors to buy high (after prices have risen
for several periods) and sell low (after prices have dropped for
several periods) can be explained by the behavioral tendency known
as
A. loss aversion.
B. familiarity bias.
C. overconfidence.
D. anchoring. Answer: D. anchoring.
Which of the following are included in technical analysis?
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,3
I. charting price movements
II. tracking trading volume
III. determining the investor's risk tolerance
IV. monitoring odd−lot trading
A. I and II only
B. II and III only
C. I, II and III
D. I, II and IV Answer: D. I, II and IV
The odd lot trading indicator assumes that
A. are good market indicators because the actions of small investors
tend to confirm bearish or bullish trends.
B. odd−lot
purchases indicate that high priced stocks like Apple and Berkshire
Hathaway are in demand.
C. odd−lot
traders are unsophisticated and time their decisions poorly.
D. odd−lot
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, 4
traders are sophisticated and tend to buy at low points and sell
when stocks are high. Answer: C. odd−lot
traders are unsophisticated and time their decisions poorly.
Jason has decided to sell his stock in an energy company because
gas and oil prices as well the price of his stock have declined in 5 of
the last 6 months. Jason has most likely fallen into the trap known
as
A. biased self−attribution.
B. loss aversion.
C. narrow framing.
D. representativeness. Answer: D. representativeness.
A cyclical company tends to:
A. have less volatile earnings than the overall market.
B. have earnings that track the overall economy.
C. have a high price-to-earnings ratio. Answer: B. have earnings that
track the overall economy.
You hear a market analyst on television say that the advance/decline
ratio for the session was
© 2025 All rights reserved
FINA 3315 Ch. 9 & 10 Questions with Correct
Answers | Updated (100% Correct Answers)
A type of mutual fund with particular appeal to investors who
accept the efficient market hypothesis is...
A. emerging markets fund.
B. asset allocation fund.
C. index fund.
D. growth opportunities fund. Answer: C. index fund.
When the market rate of interest is higher than a bond's coupon
rate, the bond will sell at a discount. (T/F) Answer: True
The process that quickly eliminates price discrepancies in efficient
markets is known as
A. arbitration.
B. market correction.
C. random fluctuation.
D. arbitrage. Answer: D. arbitrage.
© 2025 All rights reserved
,2
The tendency of investors to blame others for their failures and take
personal credit for their successes is referred to as...
A. representativeness.
B. loss aversion.
C. narrow framing.
D. self−attribution
bias. Answer: D. self−attribution
bias.
The tendency of naive investors to buy high (after prices have risen
for several periods) and sell low (after prices have dropped for
several periods) can be explained by the behavioral tendency known
as
A. loss aversion.
B. familiarity bias.
C. overconfidence.
D. anchoring. Answer: D. anchoring.
Which of the following are included in technical analysis?
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,3
I. charting price movements
II. tracking trading volume
III. determining the investor's risk tolerance
IV. monitoring odd−lot trading
A. I and II only
B. II and III only
C. I, II and III
D. I, II and IV Answer: D. I, II and IV
The odd lot trading indicator assumes that
A. are good market indicators because the actions of small investors
tend to confirm bearish or bullish trends.
B. odd−lot
purchases indicate that high priced stocks like Apple and Berkshire
Hathaway are in demand.
C. odd−lot
traders are unsophisticated and time their decisions poorly.
D. odd−lot
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, 4
traders are sophisticated and tend to buy at low points and sell
when stocks are high. Answer: C. odd−lot
traders are unsophisticated and time their decisions poorly.
Jason has decided to sell his stock in an energy company because
gas and oil prices as well the price of his stock have declined in 5 of
the last 6 months. Jason has most likely fallen into the trap known
as
A. biased self−attribution.
B. loss aversion.
C. narrow framing.
D. representativeness. Answer: D. representativeness.
A cyclical company tends to:
A. have less volatile earnings than the overall market.
B. have earnings that track the overall economy.
C. have a high price-to-earnings ratio. Answer: B. have earnings that
track the overall economy.
You hear a market analyst on television say that the advance/decline
ratio for the session was
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