Reference no: EM132036861
1. Which model would suggest the momentum effect is against market efficiency?
A. CAPM B. Fama-French three-factor world C. Both models D. No models
2. Suppose Momentum can generate alpha in a model. It is against which form of market efficiency?
A. Strong Form B. Semi-strong Form C. Weak Form D. All three forms
3. If one strictly follows a momentum strategy by buying winners and sell losers, can one make money in a market when every stock is losing money such as during the crisis?
A. Yes. B. No.
4 .According to the momentum effect, winner stocks on average generate high returns than loser stocks on average. Historically, winner stocks and loser stocks have similar market beta. This means the winner-minus-loser return
A. Cannot be fully explained by the CAPM model B. Generate zero alpha in the CAPM model C. Generate negative alpha in the CAPM model
5. Historically, winner stocks and loser stocks both tend to be growth stocks; they both tend to be medium size stocks. These mean their value beta and size beta are also very similar. Therefore, the winner-minus-loser stock return
A. Cannot be fully explained by the Fama-French 3 factor model B. Generate zero alpha in the Fama-French 3 factor model C. Generate negative alpha in the Fama-French 3 factor model
6. Is it important to know the economic explanations of a profitable investment strategy? In other words, why not just simply invest in some ideas like momentum and make money without caring too much about its underlying reasons?
7. What are the rational and irrational reasons that can generate the momentum return?
|
Revenues variable costs fixed costs working capital
: Project NPV Pessimistic Expected Optimistic Initial investment Revenues Variable costs Fixed costs Working capital.
|
|
Macrs five-year depreciation schedule on cars
: Consider a $50,000 SUV that you expect to last for 10 years. The IRS uses an MACRS 5-year depreciation schedule on cars.
|
|
Annual depreciation expense will be reported for tax purpose
: What annual depreciation expense will be reported on the income statement for the center? What annual depreciation expense will be reported for tax purposes.
|
|
Determination of wacc using principles and tools outlined
: Determination of WACC Using the principles and tools outlined in the textbook, form an estimate of the Weighted Average Cost of Capital (WACC) for the firm.
|
|
Momentum effect is against market efficiency
: Which model would suggest the momentum effect is against market efficiency?
|
|
Debt to asset leverage ration and current liquidity ratio
: Return on investment? Debt to asset leverage ration, and current liquidity ratio?
|
|
Makes widgets in volume
: Would you invest in a 8,000,000 machine that makes widgets in a volume that would give you 3,000,000 in sales. COGS would be 1,000,000.
|
|
What would be the bond value
: Suppose that two years after the bonds were issued, the required interest rate (market interest rate) fell to 7 percent. What would be the bond's value?
|
|
Beverly bonds to make jane interested in making switch
: What rate must be set on the Beverly bonds to make Jane interested in making a switch?
|