Corporate Finance 10th Edition test bank ch14

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1、ch14Student:___________________________________________________________________________1.Anefficientcapitalmarketisoneinwhich:A.brokeragecommissionsarezero.B.taxesareirrelevant.C.securitiesalwaysofferapositiverateofreturntoinvestors.D.securitypricesareguaranteedbytheU.S.SecuritiesandE

2、xchangeCommissiontobefair.E.securitypricesreflectavailableinformation.2.Thenotionthatactualcapitalmarkets,suchastheNYSE,arefairlypricediscalledthe:A.EfficientMarketsHypothesis(EMH).B.LawofOnePrice.C.OpenMarketsTheorem.D.Laissez-FaireAxiom.E.MonopolyPricingTheorem.3.Thehypothesisthatma

3、rketpricesreflectallavailableinformationofeverykindiscalled_____formefficiency.A.openB.strongC.semistrongD.weakE.stable4.Thehypothesisthatmarketpricesreflectallpubliclyavailableinformationiscalled_____formefficiency.A.openB.strongC.semistrongD.weakE.stable5.Thehypothesisthatmarketpric

4、esreflectallhistoricalinformationiscalled_____formefficiency.A.openB.strongC.semistrongD.weakE.stable6.Inanefficientmarket,thepriceofasecuritywill:A.alwaysriseimmediatelyuponthereleaseofnewinformationwithnofurtherpriceadjustmentsrelatedtothatinformation.B.reacttonewinformationoveratwo

5、-dayperiodafterwhichtimenofurtherpriceadjustmentsrelatedtothatinformationwilloccur.C.risesharplywhennewinformationisfirstreleasedandthendeclinetoanewstablelevelbythefollowingday.D.reactimmediatelytonewinformationwithnofurtherpriceadjustmentsrelatedtothatinformation.Ebeslowtoreactforth

6、efirstfewhoursafternewinformationisreleasedallowingtimeforthat.informationtobereviewedandanalyzed.7.Ifthefinancialmarketsareefficient,theninvestorsshouldexpecttheirinvestmentsinthosemarketsto:A.earnextraordinaryreturnsonaroutinebasis.B.generallyhavepositivenetpresentvalues.C.generally

7、havezeronetpresentvalues.D.producearbitrageopportunitiesonaroutinebasis.E.producenegativereturnsonaroutinebasis.8.Whichoneofthefollowingstatementsiscorrectconcerningmarketefficiency?A.Realassetmarketsaremoreefficientthanfinancialmarkets.B.Ifamarketisefficient,arbitrageopportunitiessho

8、uldbe