Exhibit 6.3 Use the Information Below for the Following Problem(S) \[\begin{array} { l l c c c } \text { Stack } & \mathrm { R } _ { \mathrm { it } } & \mathrm { R } _ { \text {mt } } & \mathrm { a } _ { \mathbf { i } } & \text { Beta } \\ \hline \text { Elliat } & 9.9 & 15.0 & 0 & 0.8 \\ \text { Hemlick } & 9.1 & 0.0 & 0 & 1 .1 \end{array}\] R?t = return for stock i during period t Rmt = return for the aggregate market during period t -Refer to Exhibit 6.3.What is the abnormal rate of return for Hemlick when you consider its systematic risk measure (beta)?

A) 0.1% B) 0.3% C) 0.5% D) 1.5% E) 3.0% A) 0.1% B) 0.3% C) 0.5% D) 1.5% E) 3.0%

Exhibit 6.2 Use the Information Below for the Following Problem(S) \[\begin{array} { c c c c c } \text { Stack } & \mathrm { R } _ { \mathbf { i t } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\ \hline \text { ABC } & 11.5 & 13.0 & 0 & 0.7 \\ \text { XYZ } & 90 & 70 & 0 & 1 .1 \end{array}\] RS1U1B1itS1U1B0= return for stock i during period t RS1U1B1mtS1U1B0 = return for the aggregate market during period t -Refer to Exhibit 6.2.What is the abnormal rate of return for Stock ABC during period t using only the aggregate market return (ignore differential systematic risk)?

A) 3.2% B) 2.4% C) 1.3% D) -1.5% E) 2.0% A) 3.2% B) 2.4% C) 1.3% D) -1.5% E) 2.0%

Exhibit 6.3 Use the Information Below for the Following Problem(S) \[\begin{array} { l l c c c } \text { Stack } & \mathrm { R } _ { \mathrm { it } } & \mathrm { R } _ { \text {mt } } & \mathrm { a } _ { \mathbf { i } } & \text { Beta } \\ \hline \text { Elliat } & 9.9 & 15.0 & 0 & 0.8 \\ \text { Hemlick } & 9.1 & 0.0 & 0 & 1 .1 \end{array}\] R?t = return for stock i during period t Rmt = return for the aggregate market during period t -Refer to Exhibit 6.3.What is the abnormal rate of return for Hemlick during period t using only the aggregate market return (ignore differential systematic risk)?

A) 0.11 B) 1.10 C) -1.80 D) - 1.80 E) -4.60 A) 0.11 B) 1.10 C) -1.80 D) - 1.80 E) -4.60

Exhibit 6.1 Use the Information Below for the Following Problem(S) \(\begin{array}{ccccc} \text { Stock } & \mathbf{R}_{\text {it }} & \mathbf{R}_{\text {mt }} & \mathbf{a}_{\mathbf{i}} & \text { Beta } \\ \hline \mathrm{C} & 12 & 10 & 0 & 0.8 \\ \mathrm{~F} & 10 & 80 & 0 & 1.1 \end{array}\) RS1U1B1itS1U1B0 = return for stock i during period t RS1U1B1mtS1U1B0 = return for the aggregate market during period t -Refer to Exhibit 6.1.What is the abnormal rate of return for Stock C during period t using only the aggregate market return (ignore differential systematic risk)?

A) 4.0% B) 1.2% C) -1.05% D) 2.0% E) -8.50 A) 4.0% B) 1.2% C) -1.05% D) 2.0% E) -8.50

Exam 6: Efficient Capital Markets

Results from studies on the effects of unexpected world events have consistently indicated that the price change is so rapid,that it takes place between the close of one day and the opening of the next day.

(True/False)

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(65)

Question 21

In an event study the objective is to

(Multiple Choice)

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Question 22

Behavioral finance differs from the standard model of finance because behavioral finance

(Multiple Choice)

4.7/5

(71)

Question 23

Which of the following behaviors is consistent with escalation bias?

(Multiple Choice)

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Question 24

The weak form of the efficient market hypothesis contends that technical trading rules are of little value.

(True/False)

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(65)

Question 25

Exhibit 6.3 Use the Information Below for the Following Problem(S) Stack Beta Elliat 9.9 15.0 0 0.8 Hemlick 9.1 0.0 0 1.1 R?t = return for stock i during period t Rmt = return for the aggregate market during period t -Refer to Exhibit 6.3.What is the abnormal rate of return for Hemlick when you consider its systematic risk measure (beta)?

(Multiple Choice)

4.9/5

(85)

Question 26

Exhibit 6.2 Use the Information Below for the Following Problem(S) Stack Beta ABC 11.5 13.0 0 0.7 XYZ 90 70 0 1.1 R_it= return for stock i during period t R_mt = return for the aggregate market during period t -Refer to Exhibit 6.2.What is the abnormal rate of return for Stock ABC during period t using only the aggregate market return (ignore differential systematic risk)?

(Multiple Choice)

4.8/5

(78)

Question 27

According to the semistrong-form efficient market hypothesis,which of the following types of information are fully reflected in stock prices?

(Multiple Choice)

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Question 28

Exhibit 6.3 Use the Information Below for the Following Problem(S) Stack Beta Elliat 9.9 15.0 0 0.8 Hemlick 9.1 0.0 0 1.1 R?t = return for stock i during period t Rmt = return for the aggregate market during period t -Refer to Exhibit 6.3.What is the abnormal rate of return for Hemlick during period t using only the aggregate market return (ignore differential systematic risk)?

(Multiple Choice)

4.8/5

(80)

Question 29

In order to confirm the weak-form efficient market hypothesis you could develop trading rules that consider

(Multiple Choice)

5.0/5

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Question 30

The results of studies that have looked at the relationship between PEG ratios and subsequent stock returns

(Multiple Choice)

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Question 31

Fusion investing is the integration of the following elements of investment valuation:

(Multiple Choice)

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Question 32

The opportunity to take advantage of the downward pressure on stock prices that result from end-of-the-year tax selling is known as

(Multiple Choice)

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Question 33

Studies examining stock splits support the semistrong form efficient market hypothesis.

(True/False)

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Question 34

A portfolio manager without superior analytical skills should

(Multiple Choice)

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Question 35

Exhibit 6.1 Use the Information Below for the Following Problem(S) Stock Beta 12 10 0 0.8 10 80 0 1.1 R_it = return for stock i during period t R_mt = return for the aggregate market during period t -Refer to Exhibit 6.1.What is the abnormal rate of return for Stock C during period t using only the aggregate market return (ignore differential systematic risk)?

(Multiple Choice)

4.9/5

(76)

Question 36

In an efficient market all securities should have:

(Multiple Choice)

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Question 37

Which of the following has not been involved in a direct test of the semi-strong form of the efficient market hypothesis?

(Multiple Choice)

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Question 38

Which of the following ratios is the most commonly used ratio for predicting the performance of a growth company?

(Multiple Choice)

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Question 39

Which is not an implication of the EMH?

(Multiple Choice)

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Question 40

Exam 6: Efficient Capital Markets

Results from studies on the effects of unexpected world events have consistently indicated that the price change is so rapid,that it takes place between the close of one day and the opening of the next day.

In an event study the objective is to

Behavioral finance differs from the standard model of finance because behavioral finance

Which of the following behaviors is consistent with escalation bias?

The weak form of the efficient market hypothesis contends that technical trading rules are of little value.

According to the semistrong-form efficient market hypothesis,which of the following types of information are fully reflected in stock prices?

In order to confirm the weak-form efficient market hypothesis you could develop trading rules that consider

The results of studies that have looked at the relationship between PEG ratios and subsequent stock returns

Fusion investing is the integration of the following elements of investment valuation:

The opportunity to take advantage of the downward pressure on stock prices that result from end-of-the-year tax selling is known as

Studies examining stock splits support the semistrong form efficient market hypothesis.

A portfolio manager without superior analytical skills should

In an efficient market all securities should have:

Which of the following has not been involved in a direct test of the semi-strong form of the efficient market hypothesis?

Which of the following ratios is the most commonly used ratio for predicting the performance of a growth company?

Which is not an implication of the EMH?

An Overview of the Investment Process

The Asset Allocation Decision

The Global Market Investment Decision

Securities Markets: Organization and Operation

Security-Market Indexes

An Introduction to Portfolio Management

An Introduction to Asset Pricing Models

Multifactor Models of Risk and Return

Analysis of Financial Statements

Security Valuation Principles

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Equity Portfolio Management Stragtegies

Technical Analysis

Bond Fundamentals

The Analysis and Valuation of Bonds

Bond Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward and Futures Contracts

Option Contracts

Swap Contracts,convertible Securities,and Other Embedded Derivatives

Professional Money Management, alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Investment Return and Risk Analysis Questions

Investment and Retirement Plans

Calculating Covariance and Correlation Coefficient of Assets

Portfolio Variance and Stock Weight Calculations

Portfolio Optimization with Negative Correlation: Finding Minimum Variance and Weight Allocation

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