Question 1. Question: (TCO 3) When viewing the terms “special returns” or “abnormal returns,” we know this can refer to _____.

the Efficient Market Hypothesis

gains in excess of the market risk-adjusted average

convertibles and warrants, etc.

More than one of the above

Question 2. Question : (TCO 3) Legal methods for attempting to profit through mergers and acquisitions include all of the following, except identifying _____.

an insider close to the information

candidates through financial or operating characteristics

securities which are undergoing unusual volume or pricing patterns

industries where companies are being absorbed

Question 3. Question : (TCO 3) An acquisition may be canceled because of any of the following except _____.

antitrust action

an unusually high premium on stock price

a lawsuit brought by stockholders

disapproval of the target company’s management

Question 4. Question : (TCO 3) New stock issues are considered a special investment situation, because _____.

they exhibit a very good long-term investment potential

the spread is greater than that in the secondary market

there is some evidence that new issues are underpriced

More than one of the above

Question 5. Question : (TCO 3) Research on the strong form shows that _____ are able to achieve superior returns.

members of the SEC

corporate insiders and public officials

market specialists and corporate insiders

the majority of professional mutual fund managers

Question 6. Question : (TCO 3) According to the Dow Theory, daily fluctuations and secondary movements in the market are used to help identify _____.

a key indicator

a primary trend


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