Accounting Homework Help

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Accounting Homework Help

Question 1.1. If major traders believe theprice of a stock should be higher than its current market price,(Points : 1)

       they have an incentive tosell the stock.
       their actions will resultin the information they possess being incorporated into the priceof the stock.
       there is little they cando because government regulation precludes their acting on whatthey know.
       they should petition theSecurities and Exchange Commission to authorize an adjustment inthe price of the stock.

Question 2.2. A chief criticism of adaptiveexpectations is that (Points : 1)

       it assumes people ignoreinformation that would be useful in making forecasts
       people have a hard timeadapting
       it doesn't rely ontechnical analysis
       it violates the efficientmarkets hypothesis

Question 3.3. Hedgers are primarily interestedin (Points : 1)

       betting on anticipatedchanges in prices.
       reducing their exposureto the risk of price fluctuations.
       increasing marketliquidity.
       reducing the spreadbetween bid and ask prices on bonds.

Question 4.4. The required return on equityfor an individual stock includes which of the following? (Points :1)

       systemic risk
       idiosyncratic risk
       risk-free interestrate
       all of the above

Question 5.5. Which of the following is NOT abenefit of derivatives? (Points : 1)

       risk sharing
       guaranteed minimumprofit
       liquidity
       information services

Question 6.6. Using forward transactionsallows (Points : 1)

       holders of common stockto lock in future dividend payments.
       the federal government tostabilize fluctuations in tax receipts.
       corporations to reduceproblems arising from future fluctuations in their dividendpayments.
       both buyers and sellersto reduce risks associated with price fluctuations.

Question 7.7. Suppose you plan to hold a stockfor one year. You expect that, in one year, it will sell for $30and pay a dividend of $3 per share. If your required return onequity is 10%, what is the most you should be willing to pay forthe share today? (Points : 1)

       $3.30
       $23
       $30
       $33

Question 8.8. According to the Gordon-Growthmodel, what is the value of a stock with a dividend of $1, requiredreturn on equity of 10% and expected growth rate of dividends of5%? (Points : 1)

       $2
       $10
       $20
       $21

Question 9.9. If the prices of financialassets follow a random walk, then (Points : 1)

       they should be easy toforecast, provided market participants have rationalexpectations.
       they should be easy toforecast, provided market participants have adaptiveexpectations.
       the change in price fromone trading period to the next is not predictable.
       major traders in themarket must not be making use of all available information aboutthe assets.

Question 10.10. In derivative markets, tradetakes place in (Points : 1)

       assets such as bonds orcommon stock that derive their value from the value of thecompanies which issue them.
       assets whose rates ofreturns must be derived from information published in financialtables.
       assets that derive theirvalue from underlying assets.
       assets which are notallowed to be traded on organized exchanges.

Pending

Other / Other

16 Sep 2017

Due Date: 16 Sep 2017

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