Question

13. If the ficient markets hypothesis is correct, then a, the number of shares of stock office for sale b. the stock market is informationally efficient c. stock prices never follow a random walk. d. All of the above are correct. is the number of shares of stock that pe her of shares of stock that people want to buy. 14. Dividends a. are the rates of return on mutual funds. b. are cash payments that companies make to shareholders c. are the difference between the price and present value per share of a stock d. are the rates of return on a company's capital stock. 15. Fundamental analysis is a. the study of the relation between risk and retum of stock portfolios. 6. the determination of the allocation of savings between stocks and bonds based on a person's degree of risk aversion c. the study of a company's accounting statements and future prospects to determine its value. d. a method used to determine how adding stocks to a portfolio will change the risk of the portfolio 16. An automobile manufacturer unexpectedly announces that it has hired a new chief executive officer. It is widely believed that the presence of this individual will raise the profitability of the corporation. At the same time interest rates unexpectedly rise. Which of the above would lend to make the price of the stock rise? a. the announcement and the rise in interest rates b. the announcement but not the rise in interest rates c. the rise in interest rates, but not the announcement d. neither the announcement nor the rise in interest rates 17. A company unexpectedly announces a product recall due to safety concerns about its product. According to the efficient markets hypothesis, this news should a. raise the price of the company's stock. b. not affect the price of the company's stock. c. reduce the price of the company's stock. d. More information is needed to answer the question. 18. Write the production function 19. If interest rate is set to lower bound how could it help the GDP growth rate at times of acute recession?

Answer 1

first 5 questions are answered.

13.(B)

reason if efficient market hypothesis is correct then stock market has communicated will with the marekt and it has spread proper information about stock from investor point of view.

14 (B)

Reason divident are cash payment made to shareholderes out of net profit after tax which is available for them

15 (C)

Reason fundamental analysis is very much concerned with accounting and financial statement and future value of goods and services in the marrket.

16.(B)

reason announcement by the owner of the company about new executive will increase the price of stock as people would be aware of new executive and thier working style so they may like it.

17. (C)

Reason this shows negligence on account of compnay that calls his cars again to provide safety and security to customer ny inviting their vehicle to be improvised again. it will decrease the good will of the company and their stock price.