1.

Bargaining power of suppliers is low if? Select the statement that is incorrect.

a.

There are many suppliers

b.

Suppliers products are standardized and/or have substitutes

c.

The industry (to which they supply) makes up the majority of their revenues

d.

Suppliers pose a credible threat of forward integration

2.

Bond L currently sells for $X. Its face value is $1000, coupon rate 5% per year (coupons paid out semi-annually), and yield to maturity 2% per half-year. What will be the price of the bond 1 year from now, right after the coupon is paid out (assuming the yields stay unchanged)?

a.

Need more information to answer

b.

Less than $X

c.

Unchanged

d.

More than $X

Clear my choice

3.

ond B has 6 years to maturity, face value of 100, and a coupon rate of 3%; the bond pays coupons semi-annually. Market yield on similar securities is 2% per half year. You can buy bond B from a friend for $92.45. Should you do it?

5.

Which of the following shows evidence against semi-strong-form market efficiency?

a.

All the other choices

b.

Small-Firm Effect

c.

Book-to-Market Effect

d.

P/E Effect

a.

None of the above

b.

Yes, since $92.45 is lower than the bonds fair value.

c.

You are indifferent as the bond is fairly priced at $92.45.

d.

No, since $92.45 is higher than the bonds fair value.

4.

Some empirical evidence shows that firms with high B/M ratio tend to outperform those with low B/M ratio, which is against:

a.

Both weak-form and semi-strong market efficiency.

b.

Semi-strong market efficiency

c.

Weak-form Market efficiency

d.

Strong-form market efficiency