Tentamen 170124 MCQ

Psychologists have found that people who make decisions that turn out badly blame themselves more when that decision was unconventional. The name for this phenomenon is A. regret avoidance B. framing C. mental accounting D. overconfidence E. obnoxicity

A.

Which of the following portfolio construction methods starts with security analysis? A. Top-down r B. Bottom-up r C. Middle-out D. Buy and hold E. Asset allocation

B. Bottom-up refers to using security analysis to find securities that are attractively priced. Top-down refers to using asset allocation as a starting point.

T-bills are financial instruments initially sold by ________ to raise funds. A. commercial banks B. the U.S. government C. state and local governments D. agencies of the federal government E. the U.S. government and agencies of the federal government

B. Only the U.S. government sells T-bills in the primary market.

Which of the following orders instructs the broker to sell at or below a specified price? A. Limit-sell order B. Stop-loss C. Limit-buy order D. Stop-buy order E. Market order

B. Stop-loss orders are to be executed if the market price decreases to the specified limit price.

An American put option can be exercised A. only at the expiration date. B. only after the expiration date. C. at any date in the indefinite future. D. at any date up until and including the maturity date. E. None of these is correct.

D.

Studies of Siamese twin companies find __________, which __________ the Efficient Market Hypothesis (EMH). A. correct relative pricing; supports B. correct relative pricing; does not support C. incorrect relative pricing; supports. D. incorrect relative pricing; does not support E. arbitrage opportunities; supports.

D. Studies of Siamese twin companies find incorrect relative pricing, which does not support the EMH.