2
FINA 5320 Newest 2026 Exam with accurate || || || || || || ||
detailed answers ||
An investor discovers that stock prices change drastically as a result of certain events. This
|| || || || || || || || || || || || || || ||
finding is a violation of: || || || ||
A. the moderate form of the efficient market hypothesis.
|| || || || || || || ||
B. the semistrong form of the efficient market hypothesis.
|| || || || || || || ||
C. the strong form of the efficient market hypothesis.
|| || || || || || || ||
D. the weak form of the efficient market hypothesis.
|| || || || || || || ||
E. no form of market efficiency but rather an indication of an efficient market. - ✔✔no form of
|| || || || || || || || || || || || || || || || || ||
market efficiency but rather an indication of an efficient market.
|| || || || || || || || ||
If a market is strong form efficient then:
|| || || || || || ||
A. company insiders are the only investors capable of earning an abnormal profit.
|| || || || || || || || || || || ||
B. abnormal profits are obtainable by any and all investors.
|| || || || || || || || ||
C. technical analysts who study past market performance have a market advantage.
|| || || || || || || || || || ||
D. all investments should have positive NPVs.
|| || || || || ||
E. company insiders have no advantage over John Q. Public investor. - ✔✔company insiders
|| || || || || || || || || || || || || ||
have no advantage over John Q. Public investor.
|| || || || || || ||
The market price of a stock tends to fluctuate throughout every trading day. The fluctuation is:
|| || || || || || || || || || || || || || ||
A. inconsistent with the semistrong form of the efficient market hypothesis because prices should
|| || || || || || || || || || || || || ||
be stable.
||
B. inconsistent with the weak form of the efficient market hypothesis because all past information
|| || || || || || || || || || || || || || ||
should already be included in the price. || || || || || ||
, 2
C. consistent with the semistrong form of efficient market hypothesis because daily prices should
|| || || || || || || || || || || || || ||
adjust as new information becomes available. || || || || ||
D. consistent with the string form of market efficiency because prices are controlled by insiders.
|| || || || || || || || || || || || || || ||
E. a strong indicator that abnormal profits can be realized. - ✔✔consistent with the semistrong
|| || || || || || || || || || || || || || ||
form of efficient market hypothesis because daily prices should adjust as new information
|| || || || || || || || || || || || ||
becomes available. ||
An overconfident investor will tend to:
|| || || || ||
A. trade primarily in securities from their local area.
|| || || || || || || ||
B. trade less frequently than an average investor.
|| || || || || || ||
C. underperform due to excess trading.
|| || || || ||
D. suffer from the disposition effect.
|| || || || ||
E. underestimates their ability to pick a winning stock. - ✔✔underperform due to excess trading.
|| || || || || || || || || || || || || ||
If financial markets are efficient, then attempting to accurately predict interest rates is:
|| || || || || || || || || || || ||
A. an endeavor best left to corporate executives.
|| || || || || || ||
B. a relatively easy and accurate exercise.
|| || || || || ||
C. a waste of good time.
|| || || || ||
D. relatively easy to do if you have a general understanding of finance and economics.
|| || || || || || || || || || || || || ||
E. a little tricky but wise managers tend to succeed at it on an ongoing basis. - ✔✔a waste of good
|| || || || || || || || || || || || || || || || || || || ||
time.
||
MM Proposition II with taxes: || || || ||
A. has the same general implications as MM Proposition II without taxes.
|| || || || || || || || || || ||
B. reveals how the interest tax shield relates to the value of a firm.
|| || || || || || || || || || || || ||
FINA 5320 Newest 2026 Exam with accurate || || || || || || ||
detailed answers ||
An investor discovers that stock prices change drastically as a result of certain events. This
|| || || || || || || || || || || || || || ||
finding is a violation of: || || || ||
A. the moderate form of the efficient market hypothesis.
|| || || || || || || ||
B. the semistrong form of the efficient market hypothesis.
|| || || || || || || ||
C. the strong form of the efficient market hypothesis.
|| || || || || || || ||
D. the weak form of the efficient market hypothesis.
|| || || || || || || ||
E. no form of market efficiency but rather an indication of an efficient market. - ✔✔no form of
|| || || || || || || || || || || || || || || || || ||
market efficiency but rather an indication of an efficient market.
|| || || || || || || || ||
If a market is strong form efficient then:
|| || || || || || ||
A. company insiders are the only investors capable of earning an abnormal profit.
|| || || || || || || || || || || ||
B. abnormal profits are obtainable by any and all investors.
|| || || || || || || || ||
C. technical analysts who study past market performance have a market advantage.
|| || || || || || || || || || ||
D. all investments should have positive NPVs.
|| || || || || ||
E. company insiders have no advantage over John Q. Public investor. - ✔✔company insiders
|| || || || || || || || || || || || || ||
have no advantage over John Q. Public investor.
|| || || || || || ||
The market price of a stock tends to fluctuate throughout every trading day. The fluctuation is:
|| || || || || || || || || || || || || || ||
A. inconsistent with the semistrong form of the efficient market hypothesis because prices should
|| || || || || || || || || || || || || ||
be stable.
||
B. inconsistent with the weak form of the efficient market hypothesis because all past information
|| || || || || || || || || || || || || || ||
should already be included in the price. || || || || || ||
, 2
C. consistent with the semistrong form of efficient market hypothesis because daily prices should
|| || || || || || || || || || || || || ||
adjust as new information becomes available. || || || || ||
D. consistent with the string form of market efficiency because prices are controlled by insiders.
|| || || || || || || || || || || || || || ||
E. a strong indicator that abnormal profits can be realized. - ✔✔consistent with the semistrong
|| || || || || || || || || || || || || || ||
form of efficient market hypothesis because daily prices should adjust as new information
|| || || || || || || || || || || || ||
becomes available. ||
An overconfident investor will tend to:
|| || || || ||
A. trade primarily in securities from their local area.
|| || || || || || || ||
B. trade less frequently than an average investor.
|| || || || || || ||
C. underperform due to excess trading.
|| || || || ||
D. suffer from the disposition effect.
|| || || || ||
E. underestimates their ability to pick a winning stock. - ✔✔underperform due to excess trading.
|| || || || || || || || || || || || || ||
If financial markets are efficient, then attempting to accurately predict interest rates is:
|| || || || || || || || || || || ||
A. an endeavor best left to corporate executives.
|| || || || || || ||
B. a relatively easy and accurate exercise.
|| || || || || ||
C. a waste of good time.
|| || || || ||
D. relatively easy to do if you have a general understanding of finance and economics.
|| || || || || || || || || || || || || ||
E. a little tricky but wise managers tend to succeed at it on an ongoing basis. - ✔✔a waste of good
|| || || || || || || || || || || || || || || || || || || ||
time.
||
MM Proposition II with taxes: || || || ||
A. has the same general implications as MM Proposition II without taxes.
|| || || || || || || || || || ||
B. reveals how the interest tax shield relates to the value of a firm.
|| || || || || || || || || || || || ||
