Can you beat the market? Practice Questions

1. Suppose some damaging information comes out about company Y this morning. The stock has been trading for a few hours today. When the bad news came out about the stock, what probably happened to the stock price after a few minutes? *

a. It went up.

b. It went down.

c. It did not change.

2. According to the efficient-market hypothesis, should you sell your shares now, a few hours after the bad news emerged? *

a. Yes.

b. No.

3. On average, buyers in the stock market have *

a. More information than sellers do.

b. Less information than sellers do.

c. The same amount of information as sellers do.

4. Is it better to invest in a mutual fund that has performed well for the past 5 years in a row or one that has performed poorly for five years in a row? *

a. Good past performance mutual fund.

b. Bad past performance mutual fund.

c. Can not be determined with the given information.

Practice Questions

Can you beat the market? Practice Questions

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