16. Investors that spend considerable time and money on the gathering information are said to be _______

a. informed

b. risk averse

c. knowledgeable

d. risk takers

17. Which of the following reflects the reason why theories of investment decision making state that beetle risk is the only risk measure that is relevant for risk averse rational investors?

a.beta risk equals the total risk of security

b.the capital pricing module (CAPM) has empirical support

c.the rational risk averse investor can diversify away unsystematic risk

d.transaction costs prevent investors from achieving full diversification

18. if too many investors withdraw from the market, then the market will lock blank _____

a.depth

b.information

c.diversity

d.growth

19. According to the capital asset pricing model , which of the following statement is correct ?

a.realized returns on a security increase with its beta risk

b.expected returns on a security decrease with its estimation risks

c.expected returns on a security increase with its estimation risk

d.expected returns on a security increase with its beta risk

20. which of the following statements best describes the effect on investors if share prices are fully informative?

a.the management discussion and analysis section of the annual report would provide useful information

b.insider trading would no longer be a concern

c.there are noise traders in the market

d.investors would stop acquiring financial information