11. The perfect market assumptions include each of the f0wing E equal access to registered brokers b. equal access to market prices c frictionless markets d. no costs of financial distress e rational investors 12. Frictionless financial markets could have which of the following? a. agency costs b. bid-ask spreads c. brokerage fees d. e irrational investors government intervention 13, which of (a) through (c) is FALSE? The risk of an individual asset when held in a portfolio with a large number of As the number of assets held in a portfolio increases, the covariance terms The extent to which risk is reduced by portfolio diversification depends on a. depends on its covariance with other assets in the portfolio b. dominate the portfolio variance calculation. C. the individual assets in the portfolio are correlated d. All of the above are true. e. All of the above are false. Please indicate "T" for true or "F" for false 26. Commercial banks in the United States face relatively few legal constraints on how much stock they are allowed to own in a particular corporation. 27. The typical NYSE firm in the United States has a board of directors that is primarily drawn frorm the ranks of management. 28. Hostile acquisitions are more common in Germany and Japan because of the concentration of equity ownership in the hands of only a few equity owners. 1 29. China's banks have been constrained by intrusive government regulation and do not yet have a large role in China's financial industry. 30. China has fully privatized its four largest banks in an effort to allow the banking industry to grow along with the economy. 31. As publicly traded securities, hedge funds are closely regulated in the United States by the Securities and Exchange Commission. 32. The amount of money in an open-end mutual fund changes as investors buy or sell the fund. 33. The amount of funds under management in a closed-end mutual fund is fixed 34. Capital markets are markets for long-term assets, with maturities greater than one year 35. The major function of the prospectus of a mutual fund is to describe how the fund has performed in the recent past