1.The coefficient of risk aversion can be used to create indifference curves. The higher the A, the steeper the indifference curve and all else equal, such investors will invest less in risky assets. True False
1.The coefficient of risk aversion can be used to create indifference curves. The higher the A, the steeper the indifference curve and all else equal, such investors will invest less in risky assets.
True
False
2.
Insiders are able to profitably trade and earn abnormal returns prior to the announcement of positive news. This is not a violation of semi strong-form efficiency
True
False
3.
At maturity of a futures contract, the spot price and futures price must be approximately the same because of marking to market
True
False
4. S
fairly priced
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overpriced
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underpriced
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in equilibrium
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none of these answers
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4.Consider the liquidity preference theory of the term structure of interest rates. On average, one would expect investors to require a higher yield on long-term bonds than on short-term bonds
True
False
5. If an investor places a market order, the stock will be sold if its price falls to the stipulated level. If an investor places a limit order, the stock will be bought if its price rises above the stipulated level.
True
False
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