Which of the following
bonds will have the longest duration?
O A. 10-year maturity
and a 10% coupon.
O B. 10-year maturity
and a 12% coupon. O
C. 12-year maturity and
an 10% coupon.
O D. 12-year maturity
and a 12% coupon.
QUESTION 32
An investor who expects
increasing interest rates should purchase a bond that has a –(i)– coupon and
a –(ii)– term to maturity.
O A. (i) high, (ii)
long.
O B. (i) zero, (ii)
long.
O C. (i) high, (ii)
short.
O D.(i) low, (ii) long
Suppose that weather
predictions published in a newspaper could be used to successfully predict the
future prices of certain securities. This would provide evidence against the
(i) Semi-strong form of
the Efficient Market Hypothesis.
(i) Strong form of the
Efficient Market Hypothesis.
(iii) Weak form of the
Efficient Market Hypothesis.
O A. (i) only
O B. (i) and (ii)
O C. (i) and (iii)
O D.(i), (ii) and (iii)
QUESTION 34 The Stock Exchange Commission
(SEC) in the U.S makes it illegal to use “inside information†to earn
profits. The SEC must believe that the market is
O A. Strong form efficient,
but not semi-strong form efficient.
O B. Semi-strong form
efficient, but not weak form efficient.
O C. Semi-strong form
efficient, but not strong form efficient.
O D. Strong form
efficient but not weak form efficient.
