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ECO 316 Version 1 Week 2 Chapter 10 Information and Financial Market Efficiency Quiz
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Download answer at https://www.examtutorials.com/course/eco-316-version-1-week-2-chapter-10-information-and-financial-market-efficiency-quiz/
Chapter 10 Information and Financial Market Efficiency 15 CORRECT ANSWERS10.1 Multiple Choice Questions1) Expectations of asset values by participants in financial marketsA) are not possible to model, given the current state of economic knowledge.B) determine market prices, but are not related to changes in market prices.C) are determined largely by governmental actions.D) determine market prices and changes in market prices.2) When market participants use all available informationA) market prices become signals for financial and economic decisions.B) spot prices converge to future prices.C) prices of financial assets remain constant over long periods of time.D) hedging is no longer necessary.3) Which of the following is NOT a way in which prices communicate information in themarkets for bonds, stocks, foreign exchange, and financial instruments?A) Prices of financial assets represent expectations of future value.B) Prices of financial assets reflects the preferences of policymakers.C) Long-term bond yields provide information about expected future short-term yields.D) Differences in interest rates in various countries reveal information about expectedchanges in exchange rates.4) The gap between the yield on a corporate bond and the yield on a U.S. Treasury bond ofthe same maturity representsA) the market's evaluation of the likelihood of future inflation.B) the market's evaluation of the likelihood of default on the bond.C) the market's evaluation of the greater liquidity of the corporate bond.D) evidence against the efficient markets hypothesis.5) If the interest rate on a ten-year bond issued by GM is 7.8% while the interest rate on a tenyear treasury bond is 4.6%, the risk premium isA) 1.70%.B) 3.2%.C) -3.2%.D) 12.4%. https://www.examtutorials.com/course/eco-316-version-1-week-2-chapter-10-information-and-financial-market-efficiency-quiz/ |
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