Financial Markets and Correct Answer

Topics: Financial markets, Stock market, Capital asset pricing model Pages: 11 (1723 words) Published: September 6, 2013
* Question 1
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| A flat term structure implies that investors expect future short-term interest rates to:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  c. be the same as the current rate.|
Response Feedback:| incorrect|
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* Question 2
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| If the market processes new information efficiently, the reaction of market prices to new information will be:Answer| | | | | Selected Answer:|  a. instantaneous and unbiased.|
Correct Answer:|  a. instantaneous and unbiased.|
Response Feedback:| correct|
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* Question 3
0.25 out of 0.25 points
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| The size effect refers to:Answer| | | |
| Selected Answer:|  b. the observation that returns on shares of smaller companies are larger than those of larger companies.| Correct Answer:|  b. the observation that returns on shares of smaller companies are larger than those of larger companies.| Response Feedback:| correct|

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* Question 4
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| Spreading an investment across many assets will eliminate:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  c. unsystematic risk|
Response Feedback:| incorrect|
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* Question 5
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| The excess return required from an investment in a risky asset over a risk-free investment is called:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  e. a risk premium|
Response Feedback:| incorrect|
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* Question 6
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| Total risk is defined as:Answer| | | |
| Selected Answer:|    [None Given]|
Correct Answer:|  e. both market risk + unique risk and systematic + unsystematic risk| Response Feedback:| incorrect|
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* Question 7
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| Flukey Gold Mines makes an unexpected announcement regarding gold production at 2 p.m. Shares of the company were traded at 12 p.m., 2.10 p.m., 2.30 p.m. and 4 p.m. If the market for Flukey Gold Mines' shares is efficient, then at which trade will the newly established share price fully reflect the new information?Answer| | | | | Selected Answer:|    [None Given]|

Correct Answer:|  c. 2.10 p.m.|
Response Feedback:| incorrect|
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* Question 8
0 out of 0.25 points
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| The connection between term and interest rates is called:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  c. term structure of interest rates.| Response Feedback:| incorrect|
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* Question 9
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| Risk that affects a large number of assets each to a greater or lesser degree is called:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  d. systematic risk|
Response Feedback:| incorrect|
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* Question 10
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| The expectations theory of the term structure of interest implies:Answer| | | | | Selected Answer:|    [None Given]|
Correct Answer:|  c. that investors can expect to achieve the same return over any future period, regardless of the security in which they invest.| Response Feedback:| incorrect|
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* Question 11
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| This online quiz is an individual assessment. Your answers should be your own work and should not be the result of work done by others.Answer| | | | | Selected Answer:|    [None Given]|

Correct Answer:|   I UNDERSTAND and AGREE that this is an individual assessment and will submit only my work.|
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* Question 12
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| Unsystematic risk is also known as:Answer| | | |
| Selected Answer:|    [None Given]|
Correct Answer:|  e. unique risk|
Response Feedback:| incorrect|
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* Question 13
0 out of 0.25 points...
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