CH 5- Investment, Securities and Analysis

63. The opportunity to take advantage of the downward pressure on stock prices that result from end-of-the-year tax selling is known as the a. End-of-the-Year Effect. b. December Anomaly. c. End-of-the-Year Anomaly. d. January Anomaly. e. New Year Anomaly.

D

67. The January anomaly refers to the phenomenon where stock prices a. decline in December. b. decline in January. c. rise in January. d. decline in December and rise in January. e. rise in December and decline in January.

D

13. The strong form of the efficient market hypothesis contends that only insiders can earn abnormal returns.

F

17. The weak-form efficient market hypothesis assumes all publicly available information is reflected in current stock prices.

F

5. The weak form of the efficient market hypothesis contends that stock prices fully reflect all public and private information.

F

1. Prices in efficient capital markets fully reflect all available information and rapidly adjust to new information.

T

12. Results of studies concerning corporate insider trading indicate that corporate insiders generally enjoy above-average returns.

T

2. An efficient market requires a large number of profit-maximizing investors.

T

33. For technical trading rules to consistently generate superior returns, the market would have to be inefficient.

T

9. Results of initial public offering (IPOs) studies tend to support the semi-strong EMH because it appears that prices adjusted rapidly after initial underpricing.

T