Multiple Choice Fun

i. The small firm, liquidity, and value anomalies are ____________.

1. Easy ways for investors to trade profitably
2. Likely to be related to unobservable risk, such as financial distress
3. Consistent with market efficiency
4. Unlikely to exist in the future

ii. Global Research Analyst Settlement (2003) did which of the following?

1. Required companies release material information simultaneously to all market participants
2. Separated investment banking from commercial banking
3. Separated investment banking from research activities
4. Required securities analysts to take the Series 7 and 63 licensing exams

iii. Which of the following is NOT an important characteristic of market efficiency?

1. there are arbitrage opportunities
2. security prices react quickly to new information
3. active trading strategies will not consistently outperform passive strategies
4. all of the above are characteristics of market efficiency

iv. The semi-strong form of the efficient markets hypothesis supports _____________.

1. technical analysis, but rejects fundamental analysis as valid
2. fundamental analysis, but rejects technical analysis as valid
3. both fundamental and technical analysis
4. neither fundamental nor technical analysis

v. Who used inside knowledge of upcoming takeover announcements in the 1980s to trade illegally?

1. Henry Blodget
2. The Hunt Brothers
3. Ivan Boesky
4. Hedge funds