Finance 370 Final Exam

1.Which of the following is a characteristic of an efficient market?

a. Small number of individuals.

b. Opportunities exist for investors to profit from publicly available information.

c. Security prices reflect fair value of the firm.

d. Immediate response occurs for new public information.

1. Diversification increases when ____ decreases.

a. variability

b. return

c. risk

d. a and c

e. all of the above

1. Corporations receive money from investors with:

a. initial public offerings.

b. seasoned new issues.

c. primary market transactions.

d. a and b.

e. all of the above.

1. Which of the following is true regarding an initial public offering?

a. The corporation gets proceeds from the investor.

b. Investors get proceeds from other investors.

c. The security is...