Question 1 of 15 1.0 Points If the capital markets are efficient, then the sale or purchase of any security at the prevailing market price is: A. Always a positive NPV transaction B. Generally a zero NPV transaction C. Is always a negative NPV transaction D. None of the above Question 2 of 15 1.0 Points Generally, a firm is able to find positive NPV opportunities with: I) Financing decisions II) Capital investment decisions III) Short-term borrowing decisions A. I only B. I and III only C. III only D. II only Question 3 of 15 1.0 Points Stock price cycles or patterns self-destruct as soon as investors recognize them through: A. stock market regulation by the Securities and Exchange Commission (SEC) B. price fixing by the specialists on New York Stock Exchange C. trading by the investors D. none of the above Question 4 of 15 1.0 Points Which of the following is a statement of semi-strong form efficiency? I) If the markets are efficient in the semi-strong form then prices will adjust immediately to public information II) If the markets are efficient in the semi-strong form then prices reflect all information III) If the markets are efficient in the semi-strong form then prices will adjust to newly published information after a long time delay A. I only B. II only C. II and III only D. III only Question 5 of 15 1.0 Points Weak form efficiency implies that past stock price(s) A. patterns tend to repeat itself in the future B. are major inputs to the investors for forming trading strategies C. do not matter D. none of the above Question 6 of 15 1.0 Points One important implication of the efficient markets hypothesis is that: A. investors should hold a diversified portfolio and avoid active trading. B. investors can benefit by engaging in day trading. C. investors should trade actively help to ensure the highest overall gain in their portfolios. D. all of the above. Question 7 of 15 1.0 Points On January 2, Michigan Mining declared a $25-per-share quarterly dividend payable on March 9th to stockholders of record on February 9. What is the latest date by which you could purchase the stock and still get the recently declared dividend? A. February 5 B. February 6 C. February 7 D. February 8 Question 8 of 15 1.0 Points Firms can repurchase shares in the following ways: I) Open market repurchase II) Through a tender offer III) Through a Dutch auction process IV) Through direct negotiation with a major shareholder A. I only B. II only C. III only D. I, II, III, and IV Question 9 of 15 1.0 Points Company X has 100 shares outstanding. It earns $1,000 per year and expects to pay all of it as dividends. If the firm expects to maintain this dividend forever, Calculate the stock price today. (The required rate of return is 10%) A. $110 B. $90 C. $100 D. None of the above Que ...