[Solved] According to the Efficient Markets Hypothesis,purchasing the Reports of Financial

Q58: Financial markets quickly eliminate unexploited profit opportunities through changes in A)dividend payments. B)tax laws. C)asset prices. D)monetary policy.

Q59: The elimination of unexploited profit opportunities requires that ________ market participants be well informed. A)all B)a few C)zero D)many

Q60: If future changes in stock prices are unpredictable,then we say that the stock prices follow a A)random walk. B)straight and narrow path. C)meandering path. D)generalized walk.

Q61: When we describe stock prices as following a random walk,we mean that future changes in stock prices are A)unpredictable. B)increasing. C)decreasing. D)constant.

Q62: The efficient markets hypothesis implies that future changes in exchange rates should for all practical purposes be A)unpredictable. B)set by each country. C)increasing. D)pegged to a standard such as the U.S. dollar or the Euro.

Q64: You have observed that the forecasts of an investment advisor consistently outperform the other reported forecasts. The efficient markets hypothesis says that future forecasts by this advisor A)may or may not be better than the other forecasts. Past performance is no guarantee of the future. B)will always be the best of the group. C)will definitely be worse in the future. What goes up must come down. D)will be worse in the near future,but improve over time.

Q65: Which of the following types of information most likely allows the exploitation of a profit opportunity? A)financial analysts' published recommendations B)technical analysis C)hot tips from a stockbroker D)insider information

Q66: Sometimes one observes that the price of a company's stock falls after the announcement of favorable earnings. This phenomenon is A)clearly inconsistent with the efficient markets hypothesis. B)consistent with the efficient markets hypothesis if the earnings were not as high as anticipated. C)consistent with the efficient markets hypothesis if the earnings were not as low as anticipated. D)consistent with the efficient markets hypothesis if the favorable earnings were expected.

Q67: You read a story in the newspaper announcing the proposed merger of Dell Computer and Gateway. The merger is expected to greatly increase Gateway's profitability. If you decide to invest in Gateway stock,you can expect to earn A)above average returns since you will share in the higher profits. B)above average returns since your stock price will definitely appreciate as higher profits are earned. C)below average returns since computer makers have low profit rates. D)a normal return since stock prices adjust to reflect expected changes in profitability almost immediately.

Q68: The efficient markets hypothesis indicates that investors A)can use the advice of technical analysts to outperform the market. B)do better on average if they adopt a "buy and hold" strategy. C)let too many unexploited profit opportunities go by if they adopt a "buy and hold" strategy. D)do better if they purchase loaded mutual funds.