An efficient capital market:
A) fully reflects all of the information currently available about a given security, excluding risk.
B) does not fully reflect all of the information currently available about a given security, including risk.
C) fully reflects all of the information currently available about a given security, including risk.
Which of the following statements about securities exchanges is NOT correct?
A) In call markets, there is only one negotiated price set to clear the market for a given stock.
B) In continuous markets, prices are set only by the auction process.
C) Securities exchanges may be structured as call markets or continuous markets.
If the efficient markets hypothesis is true, portfolio managers should do all of the following EXCEPT:
A) Minimize transaction costs.
B) Spend more time working on security selection.
C) Work more with clients to better quantify their risk preferences.
One advantage of price/sales (P/S) multiples over price to earnings (P/E) and price‐to‐book value (PBV)
multiples is that:
A) P/S can be used for distressed firms.
B) P/S is easier to calculate.
C) Regression shows a strong relationship between stock prices and sales.
An argument against using the price to cash flow (P/CF) valuation approach is that:
A) cash flows are not as easy to manipulate or distort as EPS and book value.
B) price to cash flow ratios are not as volatile as price‐to‐earnings (P/E) multiples.
C) non‐cash revenue and net changes in working capital are ignored when using earnings per share (EPS) plus noncash
charges as an estimate.
Which of the following statements concerning security valuation is least accurate?
A) The best way to value a company with no current dividend but who is expected to pay dividends in three years
is to use the temporary supernormal growth (multistage) model.
B) A firm with a $1.50 dividend last year, a dividend payout ratio of 40%, a return on equity of 12%, and a 15%
required return is worth $18.24.
C) The best way to value a company with high and unsustainable growth that exceeds the required return is to use
the temporary supernormal growth (multistage) model.
我自己来解决一下吧。如果大家不嫌弃，拿来当练习题做做吧。这部分是Equtiy Investiment这部分的题。 第一题是选C，楼上正确。 第二题选B，The price is set by either the auction process or by dealer bid-ask quotes. 第三题选B， 第四题选A，这条是使用P/S的优点。 第五题选C，这点是在使用P/CF时的缺点。 第六题选B.
