FIN 3400 Exam 2 Questions and Answers- Florida International University
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Course
FIN 3400
Institution
FIN 3400
FIN 3400 Exam 2 Questions and Answers- Florida International University
At your full-service brokerage firm, it costs $110 per stock trade. How much money do you receive after
selling 100 shares of Time Warner, Inc. (TMX), which trades at $22.62?
$2,152.00
$2,372.00
$2,388.20
$2,262.00
What ...
At your full-service brokerage firm, it costs $110 per stock trade. How much money do you receive after selling 100 shares of Time Warner, Inc. (TMX), which trades at $22.62?
$2,152.00
$2,372.00
$2,388.20
$2,262.00
What is the taxable equivalent yield on a municipal bond with a yield to maturity of 4 percent for an investor in the 28 percent tax bracket?
2.88 percent
5.56 percent
3.87 percent
4.51 percent
Which of the following is a concern regarding beta?
Using different market proxies will result in different estimates of beta.
Research indicates that a company's beta does not appear to predict its future return very well.
A company can alter its risk level which may make the beta estimate obsolete.
All of these choices are correct.
Which of the following is most correct?
In an efficient market, investors will buy overvalued stock which will drive its price down.
In an efficient market, investors will sell overvalued stock which will drive its price down.
In an efficient market, investors will sell undervalued stock which will drive its price down.
none of these choices are complete.
Which of the following statements is correct? Restricted stocks are shares of stock issued to executives that have limitations on voting rights.
The Capital Market Line graphs the relationship between return and risk (beta).
Penny stocks are the stocks of small companies that are priced below $1 per share.
All of these choices are correct.
U.S. Bancorp holds a press conference to announce a positive news event that was unexpected to the market. As soon as the announcement is made, the stock price increases $8 per share but then over the next hour the price falls resulting in a net increase of only $4. Given this information which of the following statements is correct?
This is an example of a market underreaction.
This is an example of a market overreaction.
This is an example of a semi-strong efficient market.
none of these choices are complete.
Which of the following statements is correct?
The Efficient Market Hypothesis states that security prices will be based on their expected return.
There is evidence to suggest that the market is strong-form efficient because corporate insiders have made extraordinary profits by trading on inside information.
If the market is strong-form efficient it must also be weak-form efficient and semi-strong efficient.
none of these choices are complete.
A two-year Treasury security currently earns 5.25 percent. Over the next two years, the real interest rate is expected to be 3.00 percent per year and the inflation premium is expected to be 2.00 percent per year. What is the maturity risk premium on the two-year Treasury security?
1.00 percent
5.00 percent
0.25 percent
1.05 percent
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