Question
Question B1 Under the expectation hypothesis, if the yield curve is upward-sloping, the market must expect an increase in short-term interest rates. True/False/Uncertain ? Question
Question B1
Under the expectation hypothesis, if the yield curve is upward-sloping, the market must expect an increase in short-term interest rates. True/False/Uncertain ?
Question B2
Explain how an increase in dividend payout would affect each of the following (holding all other factors constant):
a) Sustainable growth rate b) Growth in book value
Question B3
What is the differences in cash flow between short-selling an asset and entering a short futures position?
Question B4
What is another name for unsystematic risk and why does it have that name?
Question B5
What are the P/E effect and Momentum effect considered efficient market anomalies? Are there rational explanations for any of these effects ?
Question B6
Briefly explain what is the Spot-Futures Parity Theorem and how Arbitrage Possibilities can be exploited when this theorem is not valid.
Question B7
What are the trade-offs facing an investor who is considering buying a put option on an existing portfolio ?
Question B8
Explain each of the determinants of the value of a call option?Is there a positive or negative relationship between this determinant and the value of a call option?
Question B9
What are the implications for investing if a market is semi-strong-form efficient?What can you not do in a semi-strong-form efficient market?
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