A) 5 percent
B) 6 percent
C) 7 percent
D) 8 percent
F) None of the above
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A) $500/(1.04) ²
B) $500 - 500(1.04) ²
C) $500 - $500/(.04) ²
D) None of the above is correct.
F) C) and D)
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A) firm-specific risk, which will likely raise shareholders demand for higher return.
B) firm-specific risk, which will likely not likely raise shareholders demand for higher return.
C) market risk, which will likely raise shareholders demand for higher return.
D) market risk, which will likely not raise shareholders demand for higher return.
F) B) and C)
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A) 5
B) 6
C) 8
D) 9
F) A) and B)
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A) overly optimistic about the future but overestimate uncertainty.
B) overly optimistic about the future and underestimate uncertainty.
C) overly pessimistic about the future and overestimate uncertainty.
D) overly pessimistic about the future but underestimate uncertainty.
F) A) and B)
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A) the two-year account at 9 percent
B) the three-year account at 6 percent
C) the six-year account at 3 percent
D) The accounts are all worth the same.
F) A) and D)
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A) can be reduced by placing a large number of small bets rather than a small number of large bets.
B) can be reduced by increasing the number of stocks in a portfolio.
C) Both A and B are correct.
D) Neither A nor B are correct.
F) B) and C)
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A) the correlation between how well a stock does one year and how well it does the next is significantly greater than zero.
B) managed mutual funds generally outperform indexed mutual funds.
C) people tend to be overconfident when making investment decisions.
D) All of the above are correct.
F) B) and C)
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A) Interest rates rise and you get the payment sooner.
B) Interest rates rise and you have to wait longer for the payment.
C) Interest rates fall and you get the payment sooner.
D) Interest rates fall and you have to wait longer to get the payment.
F) A) and B)
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There are several possibilities.The firs...View Answer
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A) Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
B) Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
C) Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
D) Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
F) B) and C)
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A) $540.75
B) $540.80
C) $540.85
D) None of the above are correct to the nearest penny.
F) C) and D)
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A) Higher average returns come at the price of higher risk.
B) People who are risk averse should never hold stock.
C) Diversification cannot eliminate all of the risk in stock portfolio.
D) None of her conclusions are incorrect.
F) C) and D)
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A) McCloud announces, just as everyone had expected, that it has hired a new highly respected CEO.
B) McCloud announces that its profits were low, but not as low as the market had expected.
C) Analysis by a column in a business weekly indicates that McCloud is overvalued.
D) All of the above would increase the price.
F) B) and D)
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A) $140,000, but not $150,000.
B) $150,000, but not $160,000.
C) $160,000, but not $170,000.
D) $170,000, but not $180,000.
F) All of the above
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A) marginal utility diminishes as wealth rises so he must be risk averse.
B) marginal utility diminishes as wealth rises, but we can't tell from this if he is risk averse.
C) marginal utility increases as wealth rises, so he must be risk averse.
D) marginal utility increases as wealth rises, but we can't tell from this if he is risk averse.
F) All of the above
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A) 5 percent
B) 6 percent
C) 7 percent
D) 8 percent
F) A) and C)
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A) Holding stocks in many companies carries the risk of a reduced average return.
B) Real GDP varies over time and sales and profits move with real GDP.
C) When a paper producer has declining sales, it is likely that so will other paper producers.
D) If stockholders become aggravated with the way a CEO runs a company, the price of that company's stock might fall in the stock market..
F) A) and C)
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A) people should follow their gut feelings and purchase stocks they think have good prospects.
B) people will tend to sell off winning investments too quickly and hold onto losing ones too long.
C) people tend to be overly pessimistic about developments in the stock market.
D) during a speculative bubble most people are thinking that they won't be able to get out of the market before the bubble bursts.
F) B) and D)
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A) $22,880.00
B) $23,200.00
C) $23,232.00
D) $23,328.00
F) A) and D)
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