7. securities trade very close to their correct values at all times. The analysts are said to be advocates of a. fundamental analysis b. technical analysis c. the efficient market hypothesis d. duration analysis Some investment analysts believe that the market processes new information so well and so quickly that The amount of money being borrowed in a margin loan is known as the a credit balance b. debit balance c. excess margin d. margin balance The technique of using paper profits in margin accounts to partially or fully finance the acquisition of additional securities is known as a. magnifying b. loading c. pyramiding d. excess margining Fundamental analysis involves the in-depth study of the a. role of nondiversifiable risk in an investor's portfolio. b. financial condition and operating results of a given firm. c. pattern of security prices as revealed in chart formations. d. role of diversifiable risk in an investor's portfolio. 10 11 As a general rule, higher P/E ratios are associated with a. high growth rates in earnings. b. a bear market. c. a pessimistic market outlook. d. a high debt level in a company's capital structure. In general, the higher the retention ratio a. the higher the future growth rate of the company. b. the higher the dividends per share of common stock. c. the higher the future debt-equity ratio. d. the lower the future book value per share. 12 When the investment bank buys an issue and bears all risk of the issue, it has a. underwritten the issue b. agreed to a best efforts arrangement c. instituted a rights offering d. all of the above Over time, bond portfolios are rebalanced to maintain immunization. This is referred to as what? a. Relative immunization b. Variable immunization c. Reactive immunization d. Dynamic immunization