The ratio of the firm book value to market value

Assignment Help Financial Management

Reference no: EM131912607

1. Fama and French claim that after controlling for firm size and the ratio of the firm's book value to market value, beta (the coefficient for market risk premium) is:

I. Highly significant in predicting future stock returns

II. Relatively useless in predicting future stock returns

III. A good predictor of the firm's specific risk

A. I only

B. I and III only

C. II only

D. I, II, and III

2. A support level is ___________________.

A. a level beyond which the market is unlikely to rise

B. the peak of a market wave or cycle

C. an equilibrium price level justified by characteristics such as earnings and cash flows

D. a level below which the market is unlikely to fall

3. On a particular day, there were 920 stocks that advanced on the NYSE and 723 that declined. The volume in advancing issues was 80,846,000, and the volume in declining issues was 70,397,000. The trin ratio is __________, and technical analysts are likely to be __________.

A. .90; bearish

B. 1.11; bearish

C. .90; bullish

D. 1.11; bullish

4. Post-announcement Drift shows that

A. Investors only respond to the anticipation of an announcement and lack response after the announcement

B. Trading volume decreases significantly after the announcement is made

C. Trading volume increases significantly after the announcement is made

D. Prices tend to continue to move in the same direction after the initial reaction to a public announcement

Reference no: EM131912607

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