Question :
1) If a mutual fund outperforms the market in one : 1373693
1) If a mutual fund outperforms the market in one period, evidence suggests that this fund is
A) highly likely to consistently outperform the market in subsequent periods due to its superior investment strategy.
B) likely to under-perform the market in subsequent periods to average its overall returns.
C) not likely to consistently outperform the market in subsequent periods.
D) not likely to outperform the market in any subsequent period.
2) Studies of mutual fund performance indicate that mutual funds that outperformed the market in one time period usually
A) beat the market in the next time period.
B) beat the market in the next two subsequent time periods.
C) beat the market in the next three subsequent time periods.
D) do not beat the market in the next time period.
3) The number and availability of discount brokers has grown rapidly since the mid-1970s. The efficient markets hypothesis predicts that people who use discount brokers
A) will likely earn lower returns than those who use full-service brokers.
B) will likely earn about the same as those who use full-service brokers, but will net more after brokerage commissions.
C) are going against evidence suggesting that full-service brokers can help outperform the market.
D) are likely to outperform the market by a wide margin.
4) When Happy Feet Corporation announces that their fourth quarter earnings are up 10%, their stock price falls. This is consistent with the efficient markets hypothesis
A) if earnings were not as high as expected.
B) if earnings were not as low as expected.
C) if a merger is anticipated.
D) the company just invented a new bunion product.
5) To say that stock prices follow a “random walk” is to argue that stock prices
A) rise, then fall, then rise again.
B) rise, then fall in a predictable fashion.
C) tend to follow trends.
D) cannot be predicted based on past trends.
6) The efficient markets hypothesis predicts that stock prices follow a “random walk.” The implication of this hypothesis for investing in stocks is
A) a “churning strategy” of buying and selling often to catch market swings.
B) turning over your stock portfolio each month, selecting stocks by throwing darts at the stock page.
C) a “buy and hold strategy” of holding stocks to avoid brokerage commissions.
D) following the advice of technical analysts.
7) Rules used to predict movements in stock prices based on past patterns are, according to the efficient markets hypothesis,
A) a waste of time.
B) profitably employed by all financial analysts.
C) the most efficient rules to employ.
D) consistent with the random walk hypothesis.
8) Tests used to rate the performance of rules developed in technical analysis conclude that technical analysis
A) outperforms the overall market.
B) far outperforms the overall market, suggesting that stockbrokers provide valuable services.
C) does not outperform the overall market.
D) does not outperform the overall market, suggesting that stockbrokers do not provide services of any value.
9) Which of the following accurately summarize the empirical evidence about technical analysis?
A) Technical analysts fare no better than other financial analysis?on average they do not outperform the market.
B) Technical analysts tend to outperform other financial analysis, but on average they nevertheless under-perform the market.
C) Technical analysts fare no better than other financial analysis, and like other financial analysts they outperform the market.
D) Technical analysts fare no better than other financial analysis, and like other financial analysts they under-perform the market.
10) The small-firm effect refers to the
A) negative returns earned by small firms.
B) returns equal to large firms earned by small firms.
C) abnormally high returns earned by small firms.
D) low returns after adjusting for risk earned by small firms.
