A) Efficient markets 1) hypothesis is that the prices of investments reflect existing information and adjust quickly when new information enters the markets

2) usually exist when financial markets have a large number of buyers and sellers in search of the most profitable investment

3) usually exist because investors can expect prices to reflect appropriate information that permits investors to make intelligent choices about which investments will likely provide the best return

4) all of the above are true

B) Ace, Inc. stock just paid a dividend of $0.30 a share, has a growth rate in dividends of zero, and has a required return of 7%. What is the stock's current value?

1) $2.33

2) $4.29

3) $0.44

4) $4.00

C) Video Span stock just paid a dividend of $0.40, has a growth rate in dividends of zero and is currently selling for $50 a share. What is the expected return for Video Span stock?

1) 0.8%

2) 8%

3) 0.008%

4) 1.8%

D) WWW stock just paid a dividend of $0.40, has a growth rate in dividends of 7% and is currently selling for $50 a share. What is the expected return for WWW stock?

1) 0.93%

2) 5.71%

3) 7.86%

4) 7.80%

E) Ace, Inc. stock just paid a dividend of $0.80 a share, is expected to have a growth rate in dividends of 7% forever, and has a required return of 14%. What is the stock's current value?

1) $5.78

2) $12.71

3) $12.23

4) $11.43