1.Which of these statements is false?

a.

Brokerage fees charged to small investors have steadily decreased over recent decades

b.

Retail investors (individuals) are not easily scared by drops in stock prices in the stock market

c.

Index funds invest in all of the stocks included in standard measures of the market such as S&P 500

d.

Retail investors should regularly review their balance of risk and return from investing

2.What is meant by the concept of stock market efficiency?

a.

Stock prices will immediately adjust to new information.

b.

There are many buyers and sellers of stocks at any time.

c.

A company can find willing buyers for any new IPO sold.

d.

Stock prices are determined by true risk and company cash flows.

3.The term "financialization," means:

a.

How a company adjusts investment decisions to available financing

b.

Wealthy people can earn the highest returns on investment

c.

The current economy is driven by profits of financial institutions

d.

Reduced tax rates are causing more money to pass on to heirs