Question 1

1. In a value weighted index,

   		exchange rate fluctuations have a large impact.
   		exchange rate fluctuations have a small impact.
   		large companies have a disproportionate influence on the index.
   		small companies have an exaggerated effect on the index.
   		None of these are correct.

Question 2

1. Which is an example of a Style Index?

   		small-cap growth
   		mid-cap value
   		small-cap value
   		mid-cap growth
   		All of these are correct.

Question 3

1. When a market is internally efficient, it means that

   		The market has good depth
   		The market has more sellers than buyers
   		The market has price continuity
   		The market has minimal transactions costs
   		The market has more buyers than sellers

Question 4

1. A continuous market that has price continuity requires depth of buyers and sellers.

   True

   False

Question 5

1. The basic distinction between a primary and a secondary market is that

   		proceeds from sales in the primary market go to the current owner of a security; proceeds in secondary market go to the original owner.
   		primary markets involve direct dealings within regional exchanges.
   		only new securities are sold in the primary market; only outstanding securities are bought and sold in the secondary market.
   		primary markets deal exclusively in bonds; secondary markets deal primarily in common stock.
   		primary markets deal exclusively in common stocks; secondary markets deal primarily in bonds.

Question 6

1. An example of a value weighted stock market indicator series is the

   		Dow Jones Industrial Average.
   		Nikkei Dow Jones Average.
   		S & P 500 Index.
   		Value Line Index.
   		Shearson Lehman Hutton Index.