2. The source of every type of market efficiency is a capitalist economy is

a. competition

b. rational investors

c. passive investors

d. none of the above

3. Capital markets are said to be efficient if they are

a. deep

b. bread

c. expansion

d. all of the above

4. which of the following is a phase of the business cycle?

a. recession

b. recovery

c. trough

d. expansion

e. all are

5. Name the largest stock exchange outside the USA is

a. Shanghai stock exchange

b. Hong Kong stock exchange

c. london stock exchange

d. Bombay stock exchange

6. The dow jones index is computed from

a. just 500 stocks

b. the entire market

c. exactly 30 blue chip companies

d. exactly 100 stock prices

7. The best time to sell shares of auto and producers of home appliances is when the economy

a. is at the beginning of a recession

b. at the trough

c. is at the expansion

d. is at the peak

8. According to fundamental analysis which of the following determines security prices in the long run?

a. supply and demand

b. market momentum

c. intrinsic value

d. investor psychology

9. Assume the market's 4 week moving average breaks above its 20 week moving average. A technician would take this as evidence that

a. the bull market is over

b. a bear market is starting

c. stock prices will rise

d. stock prices will fall

10. if the price paid for any gives security reflects all the available information about the company issuing the security, the market Is

a. efficient

b. erratic

c.unpredictable

d.risky

11. if the long in a derivative has obligations, she owns a

a. futures contract

b. cell option

c. put option

d. warrant

13. suppose the dow jones index is made from these stocks: ABC ($185) and CBS ($154). Because of a two for one split CBS closed at $77 per share. As such the

a. market losses 92.5 points

b. divisor changed to 1.5

c. market is unchanged

d.market ross 92.5 points

e. Both B and C