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Stock Market and Stock Prices
Stock Market and Stock Prices MCQs
?
Which of the following is not a Canadian Stock Exchange
Toronto Stock Exchange
Alberta Stock Exchange
Vancouver Stock Exchange
Calgary Stock Exchange
?
Which of the following is not a feature of the Canadian Dealing Network (CDN)?
The CDN is an over-the-counter market such as the NASDAQ in the USA.
The CDN was previously known as the Canadian Over-the-counter Automated Trading System
Less than 500 stocks are quoted on the CDN.
More than 1000 stocks are quoted on the CDN.
?
The Montreal stock exchange only deals with
junior stock
senior stock
derivatives
commodities
?
The Toronto stock exchange only deals with
junior stock
senior stock
derivatives
commodities
?
Senior stocks are
stock traded on current exchanges
recently issued stocks
stocks issued by the largest corporations
stocks listed on more than one exchange
?
The best known stock price index in Canada is the
NASDAQ
Dow Jones Industrial Average
Standard ad Poor 500
TSE 300
?
How many companies go into the computation of the TSE 300?
300
Less than 300
More than 300
312
?
How many stocks are used to compute the TSE 300?
300
Less than 300
More than 300
312
?
The letter ’r’ next to a stock quotation in the financial press means that
the stock price has been revised
the dividend payment in arrears
the stock has been split
the P/E ratio is above average
?
Which of the following symbols in the stock table are considered measures a company’s performance?
Div rate
High
Vol 100s
P/E ratio
?
The weak form of the efficient market hypothesis says that the anticipated change in the price between today and tomorrow cannot be predicted by anyth...
True
False
?
The stock Yield is defined as
the dividend to stock price ratio at close converted into a percentage
the dividend to stock price ratio at close converted into an index
the stock price to dividend ratio at close converted into a percentage
the stock price to dividend ratio at close converted into an index
?
The notion that the best forecast of next period’s value of an economic variable, such as stock prices, is its current value is known as
the efficient market hypothesis (weak form)
the efficient market hypothesis (strong form)
the efficient market hypothesis (semi-strong form)
random walk
?
The presence of efficiency in the stock market results in
continuously increasing stock price indices with only minor corrections once a year such as in October
continuously increasing stock price indices with only major corrections once a year such as in October
stock prices taking random walks
stock prices reflecting their inherent riskiness
?
Which of the following is not an implication of the Random walk hypothesis?
You stand just as much chance (if not better) of outperforming the stock market by throwing darts at a board.
The best forecast of a company’s stock price is based on today’s price
A graph of the TSE 300 shows a more-or-less steady rise since the mid 1970s
Month-to-month changes in the TSE 300 reveal no pattern.
?
The weak form of the efficient market hypothesis states that
information about past stock prices has already been incorporated into predicting the future course of stock prices
relevant information contained in the past behaviour of interest rates, inflation, and even company performance is as irrelevant as past prices for forecasting future stock prices.
that there is no information whatsoever that can be profitable for the investor.
a well informed investor will always outperform the average investor when selecting which stocks to hold.
?
The strong form of the efficient market hypothesis states that
past stock prices contain no useful information for predicting the future course of prices
relevant information contained in the past behaviour of interest rates, inflation, and even company performance is as irrelevant as past prices for forecasting future stock prices.
that there is no information whatsoever that can be profitable for the investor.
a well informed investor will always outperform the average investor when selecting which stocks to hold.
?
Few economists believe the theory behind the strong form the efficient market hypothesis because
past stock prices have been a good predictor of future prices
inflation and interest rates have been a good predictor of future stock prices
insider information has, at times, explained movements in stock market prices.
the use of privileged information is illegal.
?
The fundamentalist approach suggests that the price of a stock is determined by the
fundamental economic indicators
fundamentals of a company’s performance
fundamentals of the performance of the bond market.
fundamentals of the performance of the stock market.
?
The fundamentalist and the efficient market approaches to predicting future stock prices are consistent with each other if we consider that
future economic performance is unknown
future streams of dividends are unknown
forecasts of future interest rates and inflation rates are available to the public and all market participants.
Reliable forecasts on future dividend streams are available for a price
?
Which one of the following is not an argument advanced by economists for explaining stock market volatility?
There are two types of players in the stock market: informed traders and noisy traders.
The prevalence of news such as announcements by Alan Greenspan, the Chair of the Federal Reserve Board.
The high volume of trading.
Stocks are held by individuals that have a short term time horizon and thus command a higher premium for holding stock.
?
The mean rate of return of stocks tends to be higher than that of other financial assets is an observation referred to as
the bond puzzle.
the equity premium puzzle.
the Inter-linking principle.
the mass psychology of crowds.
?
The fact that December continues to remain the best month for the Dow Jones Industrial Average
weakens the efficient market hypothesis
weakens the case of the fundamentalist approach
strengthens the efficient market hypothesis
strengthens the case of the fundamentalist approach