9. Price changes should be random and unpredictable and are the result of investors competing to discover relevant information on which to buy or sell securities before the rest of the market becomes aware of that information.

True

False

10.Bond default risk is usually referred to as credit risk and is orchestrated under the heading of credit analysis. Merrill Lynch, Morgan Stanley, and Goldman Sachs are some of the largest providers of quality ratings on bond issues.

True

False

11.If an analyst expects bond prices to decline across the yield curve, the analyst would seek to have a longer than the benchmark duration portfolio. If an analyst expects bond prices to increase across the yield curve, the analyst would seek to have a shorter than the benchmark duration portfolio.

True

False

12.Momentum suggests that good or bad performance of a particular security continues over time (i.e., short and intermediate term). While the EMH suggests the performance of individual securities is highly unpredictable, portfolios of the best (worst) performing securities appear to outperform (underperform) other securities with enough reliability to offer profit opportunities.

True

False