FIN 351

96 Anomalies related to the semi-strong form of the efficient market hypothesis indicate A The market is truly efficient B. High returns are very difficult to achieve C. The market is less than perfectly efficient D. Public information is almost useless 10 97. According to studies in behavioral finance, A. People tend to assign a higher value to their ability to outperform than is true in reality B. People tend to assign a lower value to

3 Other / Other Kaplan University / FIN 351 03 Aug 2015

91 The strong form of the efficient market hypothesis states that A A market is more than highly efficient it is actually perfect B. It is easy to beat the market C. Mutual fund mangers are superior performers D. None of the above 92. Research on the strong form shows that _______ are able to achieve superior returns. A. Members of the SEC B. Corporate insiders and public officials C. Market specialists and corporate insiders D. The majo

3 Other / Other Kaplan University / FIN 351 03 Aug 2015

86 The basic premise of ________________ is that past trends in market movements can be used to forecast or understand the future A. The Efficient Market Hypothesis B. Fundamental analysis C. Technical analysis D. None of the above 87. The weak form of the efficient market hypothesis can be tested by utilizing A. Tests of independence B. Regression analysis C. Trading rule tests D. A and C 88. The _________ of the efficient market hypo

3 Other / Other Kaplan University / FIN 351 03 Aug 2015

56 An acquisition may be canceled because of any of the following except A Antitrust action B Unusually high premium on stock price C. Lawsuit brought by stockholders D. Disapproval of the target company's management 57. Which of the following is a characteristic of an unfriendly takeover? A. Usually high premium on stock price B. An unacceptable suitor attempts to buy out the target company C. The White Knight may succeed in rescuing the

3 Other / Other Kaplan University / FIN 351 02 Aug 2015

51 Special or abnormal returns refer to A The Efficient Market Hypothesis B Gains in excess of the market risk adjusted average C. Convertibles and warrants, etc D. More than one of the above 52. From the time prior to announcement until an acquisition takes effect, the value of the stock of the acquiring company will likely A. Rise sharply B. Rise sharply, then slowly fall C. Remain largely unchanged D. Fall slowly, then rise sharply

3 Other / Other Kaplan University / FIN 351 01 Aug 2015

41 OTC stocks may not uphold the sem strong form of the efficient market hypothesis while listed stocks generally do True False 42. Under the weak of the efficient market hypothesis, stock prices are considered to be independent over time. True False 43. The strong form of the efficient market hypothesis suggests that only insiders are able to show superior risk-adjusted returns. True False 44. Acceptance of the weak form of the EMH woul

3 Other / Other Kaplan University / FIN 351 01 Aug 2015

31 The primary reason for the upward market movement in the value of the acquisition candidate is the low premium that is offered over current market value in a merger or acquisition. True False 32. The best strategy in a new public offering is often to sell the stock shortly after is becomes public. True False 33. Of particular interest to stock repurchases, is the fact that most of the negative market movement comes on after the announcem

3 Other / Other Kaplan University / FIN 351 01 Aug 2015

26 Recent research indicates little opportunity to profit from repurchase situations True False 27. A stock split has no effect on the par value of a stock. True False 28. A stock split has no effect on the retained earnings account. True False 29. Institutional investors often take advantage of the small firm effect. True False 30. In the bull market of the 1990s, many firms repurchasing their own shares were among the strongest and mos

3 Other / Other Kaplan University / FIN 351 01 Aug 2015

21 An investment banker overprices an issue in order to satisfy the corporate issuer True False 22. An investor in a new issue should be somewhat skeptical when the new funds are being used to buy out old stockholders or to acquire property from existing stockholders. True False 23. The study by Barry and Jennings of new stock issues indicates that 90 percent of the gain occurs in the opening transaction. True False 2 24. The requirement

3 Other / Other Kaplan University / FIN 351 01 Aug 2015

11 Abnormal returns refer to gains beyond what the market would normally provide after adjustment for risk True False 12. The stock of acquiring companies often increase by 60 percent or more as a result of a merger. True False 13. There is a good opportunity to achieve abnormal gains by investing in either the acquiring company's or acquired company's stock. True False 14. In a leveraged buyout, the company's balance sheet serves as a co

3 Other / Other Kaplan University / FIN 351 01 Aug 2015