1) One sign that the stock market is efficient is that prices in the market move seemingly at random, display almost no predictable, repeating patterns.

True or False

2) The IPO offer price is the price at which a newly public firm's shares begin trading in the secondary market.

True or False

3) The ________ prohibits lawmakers from profiting by making trades based on information that they receive as part of their official duties.

A. Securities Act of 1933

B. GrammLeach Bliley Act

C. Stop Trading on Congressional Knowledge Act of 2012

D.Securities Exchange Act of 1934

4) A major weakness of a partnership is ________.

A. the double taxation of income

B. the difficulty in liquidating or transferring ownership

C. its high organizational costs

D. the difficulty in maintaining owners' control

5) Corporate governance refers to ________.

A. the fact that corporations heavily influence the actions of governments through their lobbying efforts

B. the idea that a corporate CEO is really accountable to no one and must be constrained by government action

C. the rules, processes, and laws by which companies are operated, controlled, and regulated

D. the notion that corporations act like a democracy in the sense that every shareholder has an equal vote on corporate decisions