完整版投資學(xué)第7版TestBank答案12

1、Chapter 12 Behavioral Finance and Technical Analysis269Multiple Choice Questions1.Conventional theories presume that investors presumes that they .A)B)C)D)E)and behavioral finance2.3.are irrational; are irrational are rational; may not be rational are rational; are rational may not be rational; may

2、not be rational may not be rational; are rationalAnswer: B Difficulty: EasyThe premise of behavioral finance is that A)B)C)D)E)conventional financial theory ignores how real people make decisions and that people make a difference.conventional financial theory considers how emotional people make deci

3、sions but the market is driven by rational utility maximizing investors.conventional financial theory should ignore how the average person makes decisions because the market is driven by investors that are much more sophisticated than the average person.B and Cnone of the aboveAnswer: A Difficulty:

4、EasySome economists believe that the anomalies literature is consistent with investors and .ability to always process information correctly and therefore they infer correct probability distributions about future rates of return; given a probability distribution of returns, they always make consisten

5、t and optimal decisions inability to always process information correctly and therefore they infer incorrect probability distributions about future rates of return; given a probability distribution of returns, they always make consistent and optimal decisions ability to always process information co

6、rrectly and therefore they infer correct probability distributions about future rates of return; given a probability distribution of returns, they often make inconsistent or suboptimal decisions inability to always process information correctly and therefore they infer incorrect probability distribu

7、tions about future rates of return; given a probability distribution of returns, they often make inconsistent or suboptimal decisions none of the aboveA)B)C)D)E)Answer: D Difficulty: Moderate4.Information processing errors consist ofI)forecasting errorsII)overconfidenceIII)conservatismIV)framingA)I

8、and IIB)I and IIIC)III and IVD)IV onlyE)I, II and III5.Forecasting errors are potentially important because A) B) C) D) E)Answer: E Difficulty: Moderate research suggests that people underweight recent information. research suggests that people overweight recent information. research suggests that p

9、eople correctly weight recent information. either A or B depending on whether the information was good or bad. none of the above.Answer: B Difficulty: Moderate6.DeBondt and Thaler believe that high P/E result from investorsearnings expectations that are too extreme. earnings expectations that are no

10、t extreme enough. stock price expectations that are too extreme. stock price expectations that are not extreme enough. none of the above.A)B)C)D)E)Answer: A Difficulty: Moderate7.If a person gives too much weight to recent information compared to prior beliefs, they would make errors.framing selecti

11、on bias overconfidence conservatism forecastingA)B)C)D)E)Answer: E Difficulty: Moderate8.Single men trade far more often than women. This is due to greater men.A)B)C)D)E)framing regret avoidance overconfidence conservatism none of the aboveAnswer: C Difficulty: Moderate9. may be responsible for the

12、prevalence of active versus passive investments management.A) B) C) D) E)Forecasting errors Overconfidence Mental accounting Conservatism Regret avoidanceAnswer: B Difficulty: Moderate10.11.amongBarber and Odean (2000) ranked portfolios by turnover and report that the difference in return between th

13、e highest and lowest turnover portfolios is 7% per year. They attribute this to A) B) C) D) E)overconfidence framing regret avoidance sample neglect all of the aboveAnswer: A Difficulty: Moderate bias means that investors are too slow in updating their beliefs in response to evidence.A) B) C) D) E)f

14、raming regret avoidance overconfidence conservatism none of the aboveAnswer: D Difficulty: Moderate12.regret avoidance framing mental accounting overconfidence obnoxicityPsychologists have found that people who make decisions that turn out badly blame themselves more when that decision was unconvent

15、ional. The name for this phenomenon isA)B)C)D)E)Answer: A Difficulty: ModerateRationale: An investments example given in the text is buying the stock of a start-up firm that shows subsequent poor performance, versus buying blue chip stocks that perform poorly. Investors tend to have more regret if t

16、hey chose the less conventional start-up stock. DeBondt and Thaler say that such regret theory is consistent with the size effect and the book-to-market effect.13.An example of is that a person may reject an investment when it is posed inframing regret avoidance overconfidence conservatism none of t

17、he aboveterms of risk surrounding potential gains but may accept the same investment if it is posed in terms of risk surrounding potential losses.A)B)C)D)E)Answer: A Difficulty: Moderate14.Statman (1977) argues that is consistent with some investors irrationalmental accounting regret avoidance overc

18、onfidence conservatism none of the abovepreference for stocks with high cash dividends and with a tendency to hold losing positions too long.A)B)C)D)E)Answer: A Difficulty: Moderate15.An example of is that it is not as painful to have purchased a blue-chip stockthat decreases in value, as it is to l

19、ose money on an unknown start-up firm. A) B) C) D) E)mental accounting regret avoidance overconfidence conservatism none of the aboveAnswer: B Difficulty: Moderate16.Arbitrageurs may be unable to exploit behavioral biases due toI) II) III) IV)V)fundamental risk implementation costs model risk conser

20、vatism regret avoidance17.A)B)C)D)E)I and II onlyI, II, and IIII, II, III, and V II, III, and IV IV and VAnswer: B Difficulty: Moderate are good examples of the limits to arbitrage because they show that the law of one price is violated.I) II) III)IV) V)Siamese Twin Companies Unit trustsClosed end f

21、undsOpen end fundsEquity carve outsA)B)C)D)E)I and III, II, and III I, III, and V IV and VVAnswer: C Difficulty: Moderate18.A)B)C)D)E) was the grandfather of technical analysis. Harry Markowitz William SharpeCharles Dow Benjamin Graham none of the aboveAnswer: C Difficulty: EasyRationale: Charles Do

22、w, the originator of the Dow Theory, was the grandfather of technical analysis. Benjamin Graham might be considered the grandfather of fundamental analysis. Harry Markowitz and William Sharpe might be considered the grandfathers of modern portfolio theory.19.The goal of the Dow theory is toidentify

23、head and shoulder patterns. identify breakaway points.identify resistance levels.identify support levels. identify long-term trends.A)B)C)D)E)Answer: E Difficulty: Easy20.Rationale: The Dow theory uses the Dow Jones Industrial Average as an indicator of long-term trends in market prices.A long-term

24、movement of prices, lasting from several months to years is calledA)B)C)D)E)a minor trend a primary trend an intermediate trend trend analysisB and DAnswer: B Difficulty: EasyRationale: Minor trends are merely day-to-day price movements; intermediate trends are or offsetting movements in one directi

25、on after longer-term movements in another direction; trends lasting for the period described above are primary trends.Chap ter 12 Behavioral Finance and Tech ni cal An alysis27521.A daily fluctuation of little importance is called A) B) C) D) E)a minor trend a primary trend an intermediate trend a m

26、arket trend none of the aboveAnswer: A Difficulty: Easy22.Price movements that are caused by short-term deviations of prices from the underlying trend line are calledA)B)C)D)E)primary trends. secondary trends. tertiary trends. Dow trends. contrary trends.Answer: B Difficulty: EasyRationale: The seco

27、ndary trend is caused by these deviations, which are eliminated by corrections that bring the prices back to the trend lines.23.The Dow theory posits that the three forces that simultaneously affect stock prices areI) II) III)IV) V)primary trend intermediate trend momentum trend minor trend contrari

28、an trendA)B)C)D)E)I, II, and III II, III, and IV III, IV and VI, II, and IV I, III, and VAnswer: D Difficulty: Moderate24.The Elliot Wave TheoryA)B)C)D)E)25.A trin ratio of less tha n 1.0 is con sidered as aA)B)C)D)E)bearish sig nalbullish sig nalbearish sig nal by some tech ni cal an alysts and a b

29、ullish sig nal by other tech nical an alystsbullish sig nal by some fun dame ntalistsC and Dis a rece nt variati on of the Dow Theorysuggests that stock p rices can be described by a set of wave p atter ns is similar to the Kon dratieff Wave theoryA and BA, B, and CAn swer: E Difficulty: EasyRati on

30、 ale: Both the Elliot Wave Theory and the Kon dratieff Wave Theory are rece nt variati ons on the Dow Theory, which suggests that stock p rices move in ide ntifiable wave p atter ns.An swer: B Difficulty: EasyRati on ale: A trin ratio of less tha n 1.0 is con sidered bullish because the decli ning s

31、tocks have lower average volume tha n the adva ncing stocks, in dicati ng net buying p ressure.26.On October 29, 1991 there were 1,031 stocks that adva need on the NYSE and 610 that decli ned. The volume in adva ncing issues was 112,866,000 and the volume in decli ning issues was 58,188,000. The tri

32、n ratio for that day was and tech ni cal an alysts0.87, bullish0.87, bearish1.15, bullish1.15, bearish none of the abovewere likely to be.A)B)C)D)E)An swer: A Difficulty: ModerateRatio nale: (1,031/610)/ (112,866,000/58,388,000) = 0.87. A trin ratio less than 1 is con sidered bullish because adva nc

33、ing stocks have a higher volume tha n decli ning stocks, in dicat ing a buying p ressure.27.In regard to moving averages, it is considered to be a market price breaks through the moving average from A) B) C) D) E)bearish; below bullish: below bearish; above bullish above B and Csignal whenAnswer: E

34、Difficulty: Moderate28.Two popular moving average periods are90-day and 52 week 180-day and three year 180-day two year 200-day and 53 week 200-day and two yearA)B)C)D)E)Answer: D Difficulty: Moderate29.put-call ratio trin ratio Breadth confidence index all of the above is a measure of the extent to

35、 which a movement in the market index is reflected in the price movements of all stocks in the market.A)B)C)D)E)Answer: C Difficulty: Moderate30.Then confidence index is computed from considered signals.A) B) C) D) E)and higher values arebond yields; bearish odd lot trades; bearish odd lot trades; b

36、ullish put/call ratios; bullish bond yields; bullishAnswer: E Difficulty: ModerateChapter 12 Behavioral Finance and Technical Analysis28531.The put/call ratio is computed as signals.the number of outstanding put options divided by outstanding call options; bullish or bearishthe number of outstanding

37、 put options divided by outstanding call options; bullish the number of outstanding put options divided by outstanding call options; bearish the number of outstanding call options divided by outstanding put options; bullish the number of outstanding call options divided by outstanding put options; b

38、ullishand higher values are considered32.33.34.A)B)C)D)E)Answer: A Difficulty: ModerateThe efficient market hypothesis A) B) C) D) E)implies that security prices properly reflect information available to investors has little empirical validityimplies that active traders will find it difficult to out

39、perform a buy-and-hold strategy B and CA and CAnswer: E Difficulty: ModerateTests of market efficiency have focused on A)B)C)D)E)the mean-variance efficiency of the selected market proxy strategies thatwould have provided superior risk-adjusted returns results of actual investments of professional m

40、anagers B and C A and BAnswer: D Difficulty: ModerateThe anomalies literatureA)B)C)D)E)provides a conclusive rejection of market efficiency provides a conclusive support of market efficiency suggests that several strategies would have provided superior returns A and C none of the aboveAnswer: C Diff

41、iculty: Moderate35.Behavioral finance argues thatA)B)C)D)E)even if security prices are wrong it may be difficult to exploit themthe failure to uncover successful trading rules or traders cannot be taken as proof of market efficiency investors are rationalA and B all of the aboveAnswer: D Difficulty:

42、 Moderate36.Markets would be inefficient if irrational investors arbitragers were .A)B)C)D)E)existed; unlimited did not exist; unlimited existed; limited did not exist; limited none of the aboveand actions ifAnswer: C Difficulty: Moderate37.If prices are correct A) B) C)D)E)and if prices are not cor

43、rect .there are no easy profit opportunities; there are no easy profit opportunities there are no easy profit opportunities; there are easy profit opportunities there are easy profit opportunities; there are easy profit opportunities there are easy profit opportunities; there are no easy profit oppo

44、rtunities none of the aboveAnswer: A Difficulty: Moderate38.Information processing errors Framing errorsMental accounting errors Regret avoidance all of the above can lead investors to misestimate the true probabilities of possible events or associated rates of return.A)B)C)D)E)Answer: A Difficulty:

45、 Moderate2.and .people give too little weight to recent experience compared to prior beliefs; tend to make forecasts that are too extreme given the uncertainty of their information people give too much weight to recent experience compared to prior beliefs; tend to make forecasts that are t

46、oo extreme given the uncertainty of their information people give too little weight to recent experience compared to prior beliefs; tend to make forecasts that are not extreme enough given the uncertainty of their informationpeople give too much weight to recent experience compared to prior beliefs;

47、 tend to make forecasts that are not extreme enough given the uncertainty of their information none of the aboveKahneman and Tversky (1973) report that people A)B)C)D)E)Answer: B Difficulty: DifficultErrors in information processing can lead investors to misestimate A) B)C) D)E)true probabilities of

48、 possible events and associated rates of return true probabilities of possible events rates of returnthe ability to uncover accounting manipulation fraudAnswer: A Difficulty: ModerateDeBondt and Thaler (1990) argue that the P/E effect can be explained by A) B)C)D) E)forecasting errorsearnings expect

49、ations that are too extreme earnings expectations that are not extreme enough regret aviodanceA and BAnswer: E Difficulty: ModerateBarber and Odean (2001) report that men trade _ the frequent trading leads to returns.A) B) C) D) E)frequently than women andless; superior less; inferior more; superior

50、 more; inferior none of the aboveAnswer: D Difficulty: Moderate43.Conservatism implies that investors are too _ response to new evidence and that they initially A) B) C) D) E)in updating their beliefs in _ react to news.quick; overreact quick; under react slow; overreact slow; under react none of th

51、e above44.decision using that information due to less-than-fully rational; behavioral biases fully rational; behavioral biases less-than-fully rational; fundamental risk fully rational; fundamental risk fully rational; utility maximization45.Answer: D Difficulty: ModerateIf information processing we

52、re perfect, many studies conclude that individuals would tend to makeA)B)C)D)E)Answer: A Difficulty: ModerateThe assumptions concerning the shape of utility functions of investors differ between conventional theory and prospect theory. Conventional theory assumes that utility functions are whereas p

53、rospect theory assumes that utility functions areA)B)C)D)E)concave and defined in terms of wealth; s-shaped (convex to losses and concave to gains) and defined in terms of loses relative to current wealthconvex and defined loses relative to current wealth; s-shaped (convex to losses and concave to g

54、ains) and defined in terms of loses relative to current wealth s-shaped (convex to losses and concave to gains) and defined in terms of loses relative to current wealth; concave and defined in terms of wealth s-shaped (convex to losses and concave to gains) and defined in terms of wealth; concave and defined in terms of loses relative to current wealthconvex and defined in terms of wealth; concave and defined in terms of gains relative to current wealthAnswer: A Difficulty: Difficult46. The law-of-one-price posits that ability to arbitrage would for