Question :
41.Wheneverthepriceofanassetrisesabovewhatappearstobeitsfundamentalvalue,themarketissaidtobeexperiencinga
a.conjecturalmistake.
b.fundamentalmishap.
c.speculativebubble.
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41.Wheneverthepriceofanassetrisesabovewhatappearstobeitsfundamentalvalue,themarketissaidtobeexperiencinga
a.conjecturalmistake.
b.fundamentalmishap.
c.speculativebubble.
d.temporaryinefficiency.
42.Whichofthefollowingtermsisusedtodescribeasituationinwhichthepriceofanassetrisesabovewhatappearstobeitsfundamentalvalue?
a.“randomwalk”
b.“randombubble”
c.“speculativebubble”
d.“speculativehedge”
43.Anassetmarketissaidtoexperienceaspeculativebubblewhen
a.thepriceoftheassetrisesabovewhatappearstobeitsfundamentalvalue.
b.thepriceoftheassetappearstofollowarandomwalk.
c.themarketcannotestablishanequilibriumpricefortheasset.
d.theassetisanaturalresourceanditssupplyismanipulatedbyforeignnationsandforeignfirms.
44.Thepossibilityofspeculativebubblesinthestockmarketarisesinpartbecause
a.stockpricesmaynotdependatallonpsychologicalfactors.
b.fundamentalanalysismaybethecorrectwaytoevaluatethevalueofstocks.
c.futurestreamsofdividendpaymentsareveryhardtoestimate.
d.thevalueofsharesofstockdependsnotonlyonthefuturestreamofdividendpaymentsbutalsoonthepriceatwhichthestockwillbesold.
45.Ifassetmarketsaredrivenbythe“animalspirits”ofinvestors,then
a.thosemarketsreflectrationalbehavior.
b.thosemarketsreflectirrationalbehavior.
c.theefficientmarketshypothesisiscorrect.
d.thestockmarketexhibitsinformationalefficiency.
46.Diversification
a.increasesthelikelyfluctuationinaportfolio’sreturn.Thus,thelikelystandarddeviationoftheportfolio’sreturnishigher.
b.increasesthelikelyfluctuationinaportfolio’sreturn.Thus,thelikelystandarddeviationoftheportfolio’sreturnislower.
c.reducesthelikelyfluctuationinaportfolio’sreturn.Thus,thelikelystandarddeviationoftheportfolio’sreturnishigher.
d.reducesthelikelyfluctuationinaportfolio’sreturn.Thus,thelikelystandarddeviationoftheportfolio’sreturnislower.
47.Thevalueofastockisbasedonthe
a.presentvaluesofthedividendstreamandfinalprice.Asaresult,thevalueofastockriseswheninterestratesrise.
b.presentvaluesofthedividendstreamandfinalprice.Asaresult,thevalueofastockfallswheninterestratesrise.
c.futurevaluesofthedividendstreamandfinalprice.Asaresult,thevalueofastockriseswheninterestratesrises.
d.futurevaluesofthedividendstreamandfinalprice.Asaresult,thevalueofastockfallswheninterestratesrise.
48.Supposethatanincreasedriskofmortgagedefaultslowerstheexpectedprofitabilityofbanks.Thenwewouldexpecttosee
a.thedemandforbankstocksrisewhichwouldraisethepricesofbankstocks.
b.thedemandforbankstocksrisewhichwouldreducethepricesofbankstocks.
c.thedemandforbankstocksfallwhichwouldraisethepricesofbankstocks.
d.thedemandforbankstocksfallwhichwouldreducethepricesofbankstocks.
49.Anautomobilemanufacturerunexpectedlyannouncesthatithashiredanewchiefexecutiveofficer.Itiswidelybelievedthatthepresenceofthisindividualwillraisetheprofitabilityofthecorporation.Atthesametimeinterestratesunexpectedlyrise.Whichoftheabovewouldtendtomakethepriceofthestockrise?
a.theannouncementandtheriseininterestrates
b.theannouncementbutnottheriseininterestrates
c.theriseininterestrates,butnottheannouncement
d.neithertheannouncementnortheriseininterestrates
50.Theefficientmarketshypothesisimplies
a.thatallstocksarefairlyvaluedallthetimeandthatnostockisabetterbuythananyother.
b.thatallstocksarefairlyvaluedallthetime,butthatsomestocksmaybebetterbuysthanother.
c.thatsomestocksmaybebetterbuysthanothersandstockexpertscandeterminewhichones.
d.thatnostockisefficientlyvalued.