投资学第7版test_bank答案.doc

Chapter 11 The Efficient Market Hypothesis 237 Multiple Choice Questions 1. If you believe in the ________ form of the EMH, you believe that stock prices reflect all relevant information including historical stock prices and current public information about the firm, but not information that is available only to insiders. A) semistrong B) strong C) weak D) A, B, and C E)none of the above Answer: A Difficulty: Easy Rationale: The semistrong form of EMH maintains that stock prices immediately reflect all historical and current public information, but not inside information. 2. Proponents of the EMH typically advocate A) an active trading strategy. B) investing in an index fund. C)a passive investment strategy. D)A and B E)B and C Answer: E Difficulty: Easy Rationale: Believers of market efficiency advocate passive investment strategies, and an investment in an index fund isone of the most practical passive investment strategies, especially for small investors. 3. If you believe in the _______ form of the EMH, you believe that stock prices reflect all information that can be derived by examining market trading data such as the history of past stock prices, trading volume or short interest. A) semistrong B) strong C) weak D) allof the above E)none of the above Answer: C Difficulty: Easy Rationale: The information described above is market data, which is the data set for the weak form of market efficiency. The semistrong form includes the above plus all other public information. The strong form includes all public and private information. Chapter 11 The Efficient Market Hypothesis 238 4. If you believe in the _________ form of the EMH, you believe that stock prices reflect all available information, including information that is available only to insiders. A) semistrong B) strong C) weak D) allof the above E)none of the above Answer: B Difficulty: Easy Rationale: The strong form includes all public and private information. 5. If you believe in the reversal effect, you sh