41. Several anomalies have been uncovered that appear to add risk-adjusted returns above what is expected and include the P/E effect, the small firm effect, the neglected firm effect, post earnings announcement price drift, and the book to market effect. The debate surrounding their existence centers on whether these anomalies represent market inefficiency or poorly understood (or measured) risk premiums.

True

False

42.The prices of short-term bonds tend to be more sensitive to interest rate changes than the prices of long-term bonds. Coupons impact interest rate sensitivities.

True

False

43.The law of one price finance suggest that identical assets should have identical prices yet there are instances where that does not appear to be the case. The reasons, embedded in the limits to arbitrage theory, suggests that fundamental risk, short selling constraints, and expenses may help to explain it.

True

False

44.As evidenced by recent market action (February-March 2020), one category of negative beta securities or assets is related to gold.

True

False