Words: 412
Question 1 O out of 0. 25 points I A flat term structure implies that investors expect future short-term interest rates to:Answer I I Selected Answer: I [None Given] I Correct Answer: I c. Be the same as the current rate. I Response Feedback: I incorrect I * Question 2 0. 25 out of 0. 25 points I If the market processes new information efficiently, the reaction of market prices to new information will be:Answer I I Selected Answer: I a. Instantaneous and unbiased. I Correct Answer: I a. Instantaneous and unbiased. I I correctly * Question 3 I The size effect refers to:Answer I I Selected Answer: I b. E observation that returns on shares of smaller companies are larger than those of larger companies. I Correct Answer: I b. The observation that returns on shares of smaller companies are larger than those of larger companies. I Response Feedback: I correctly * Question 4 I Spreading an investment across many assets will eliminate:Answer Correct Answer: I c. Unsystematic risk I * Question 5 I The excess return required from an investment in a risky asset over a risk-free investment is called:Answer I Correct Answer: I e. A risk premium I * Question 6 I Total risk is defined as:Answer I
Correct Answer: I e. Both market risk + unique risk and systematic + unsystematic risk I Response Feedback: I incorrect I * Question 7 I Fluked Gold Mines makes an unexpected announcement regarding gold production at 2 p. M. Shares of the company were traded at 12 p. M. , 2. 10 p. M. , 2. 30 p. M. And 4 p. M. If the market for Fluked Gold Mines’ shares is efficient, then at which trade will the newly established share price fully reflect the new information? Answer I Correct Answer: I c. 2. 10 p. M. I * Question 8 I The connection between term and interest rates is called:Answer I
Selected Answer: I [None Given] I Correct Answer: I c. Term structure of interest rates. I Response Feedback: incorrect * Question 9 I Risk that affects a large number of assets each to a greater or lesser degree is called:Answer I Correct Answer: I d. Systematic risk I * Question 10 I The expectations theory of the term structure of interest implies:Answer I Correct Answer: I c. That investors can expect to achieve the same return over any future period, regardless of the security in which they invest. I Response Feedback: I incorrect I * Question 11 O out of O points I This online quiz is an individual assessment.