(完整word版)投资学第7版TestBank答案12

1、Chapter 12 Behavioral Finance and Technical AnalysisMultiple Choice Questions1. Conventional theories presume that investors and behavioral financepresumes that they A) are irrational; are irrationalB) are rational; may not be rationalC) are rational; are rationalD) may not be rational; may not be r

2、ationalE) may not be rational; are rationalAnswer: B Difficulty: Easy2. The premise of behavioral finance is thatA) conventional financial theory ignores how real people make decisions and that people make a difference.B) conventional financial theory considers how emotional people make decisions bu

3、t the market is driven by rational utility maximizing investors.C) 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.D) B and CE) none of the aboveAnswer: A Difficulty:

4、 Easy3. Some economists believe that the anomalies literature is consistent with investo rs and A) 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 co

5、nsistent and optimal decisionsB) 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 decisionsC) ability to always process inf

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

7、lity distributions about future rates of return; given a probability distribution of returns, they often make inconsistent or suboptimal decisionsE) none of the above4. Information processing errors consist ofI) forecasting errorsII) overconfidenceIII) conservatismIV) framingA) I and IIB) I and IIIC

8、) III and IVD) IV onlyE) I, II and IIIAnswer: E Difficulty: Moderate5. Forecasting errors are potentially important becauseA) research suggests that people underweight recent information.B) research suggests that people overweight recent information.C) research suggests that people correctly weight

9、recent information.D) either A or B depending on whether the information was good or bad.E) none of the above.Answer: B Difficulty: Moderate6. DeBondt and Thaler believe that high P/E result from investorsA) earnings expectations that are too extreme.B) earnings expectations that are not extreme eno

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

11、verconfidenceD) conservatismE) forecastingAnswer: E Difficulty: Moderate261Chapter 12 Behavioral Finance and Technical Analysis8. Single men trade far more often than women. This is due to greater amongmen.A) framingB) regret avoidanceC) overconfidenceD) conservatismE) none of the aboveAnswer: C Dif

12、ficulty: Moderate9. may be responsible for the prevalence of active versus passiveinvestments management.A) Forecasting errorsB) OverconfidenceC) Mental accountingD) ConservatismE) Regret avoidanceAnswer: B Difficulty: Moderate10. Barber and Odean (2000) ranked portfolios by turnover and report that

13、 the difference in return between the highest and lowest turnover portfolios is 7% per year. They attribute this toA) overconfidenceB) framingC) regret avoidanceD) sample neglectE) all of the aboveAnswer: A Difficulty: Moderate11. bias means that investors are too slow in updating their beliefs in r

14、esponse toevidence.A) framingB) regret avoidanceC) overconfidenceD) conservatismE) none of the aboveAnswer: D Difficulty: Moderate12. Psychologists have found that people who make decisions that turn out badly blame themselves more when that decision was unconventional. The name for this phenomenon

15、isA) regret avoidanceB) framingC) mental accountingD) overconfidenceE) obnoxicityAnswer: 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. Invest

16、ors tend to have more regret if they 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 interms of risk surrounding po

17、tential gains but may accept the same investment if it is posed in terms of risk surrounding potential losses.A) framingB) regret avoidanceC) overconfidenceD) conservatismE) none of the aboveAnswer: A Difficulty: Moderate14. Statman (1977) argues that is consistent with some investors irrationalpref

18、erence for stocks with high cash dividends and with a tendency to hold losing positions too long.A) mental accountingB) regret avoidanceC) overconfidenceD) conservatismE) none of the aboveAnswer: A Difficulty: Moderate15. An example of is that it is not as painful to have purchased a blue-chip stock

19、that decreases in value, as it is to lose money on an unknown start-up firm.A) mental accountingB) regret avoidanceC) overconfidenceD) conservatismE) none of the aboveAnswer: B Difficulty: Moderate16. Arbitrageurs may be unable to exploit behavioral biases due to .I) fundamental riskJ) ) implementat

20、ion costsK) I) model riskL) ) conservatismV) regret avoidanceW) I and II onlyX) I, II, and IIIY) I, II, III, and VZ) II, III, and IVAA) IV and VAnswer: B Difficulty: Moderate17. are good examples of the limits to arbitrage because they show that thelaw of one price is violated.I) Siamese Twin Compan

21、iesJ) ) Unit trustsK) I) Closed end fundsL) ) Open end fundsV) Equity carve outsW) I and IIX) I, II, and IIIY) I, III, and VZ) IV and VAA) VAnswer: C Difficulty: Moderate18. was the grandfather of technical analysis.A) Harry MarkowitzB) William SharpeC) Charles DowD) Benjamin GrahamE) none of the ab

22、oveAnswer: C Difficulty: EasyRationale: Charles Dow, 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 t

23、heory.19. The goal of the Dow theory is toA) identify head and shoulder patterns.B) identify breakaway points.C) identify resistance levels.D) identify support levels.E) identify long-term trends.Answer: E Difficulty: EasyRationale: The Dow theory uses the Dow Jones Industrial Average as an indicato

24、r of long-term trends in market prices.20. A long-term movement of prices, lasting from several months to years is calledA) a minor trendB) a primary trendC) an intermediate trendD) trend analysisE) B and DAnswer: B Difficulty: EasyRationale: Minor trends are merely day-to-day price movements; inter

25、mediate trends are or offsetting movements in one direction after longer-term movements in another direction; trends lasting for the period described above are primary trends.27521. A daily fluctuation of little importance is called A) a minor trendB) a primary trendC) an intermediate trendD) a mark

26、et trendE) 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) primary trends.B) secondary trends.C) tertiary trends.D) Dow trends.E) contrary trends.Answer: B Difficulty: EasyRationale: The sec

27、ondary 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) primary trendJ) ) intermediate trendK) I) momentum trendL) ) minor trendV) contr

28、arian trendW) I, II, and IIIX) II, III, and IVY) III, IV and VZ) I, II, and IVAA) I, III, and VAnswer: D Difficulty: Moderate24. The Elliot Wave Theory.A) is a recent variation of the Dow TheoryB) suggests that stock prices can be described by a set of wave patternsC) is similar to the Kondratieff W

29、ave theoryD) A and BE) A, B, and CAnswer: E Difficulty: EasyRationale: Both the Elliot Wave Theory and the Kondratieff Wave Theory are recent variations on the Dow Theory, which suggests that stock prices move in identifiable wave patterns.25. A trin ratio of less than 1.0 is considered as a.A) bear

30、ish signalB) bullish signalC) bearish signal by some technical analysts and a bullish signal by other technical analystsD) bullish signal by some fundamentalistsE) C and DAnswer: B Difficulty: EasyRationale: A trin ratio of less than 1.0 is considered bullish because the declining stocks have lower

31、average volume than the advancing stocks, indicating net buying pressure.26. On October 29, 1991 there were 1,031 stocks that advanced on the NYSE and 610 that declined. The volume in advancing issues was 112,866,000 and the volume in declining issues was 58,188,000. The trin ratio for that day was

32、and technical analysts were likely to be.A) 0.87, bullishB) 0.87, bearishC) 1.15, bullishd) 1.15, bearishE) none of the aboveAnswer: A Difficulty: ModerateRationale: (1,031/610) / (112,866,000/58,388,000) = 0.87. A trin ratio less than 1 is considered bullish because advancing stocks have a higher v

33、olume than declining stocks, indicating a buying pressure.27. In regard to moving averages, it is considered to be a signal whenmarket price breaks through the moving average from A) bearish; belowB) bullish: belowC) bearish; aboveD) bullish aboveE) B and CAnswer: E Difficulty: Moderate28. Two popul

34、ar moving average periods areA) 90-day and 52 weekB) 180-day and three yearC) 180-day two yearD) 200-day and 53 weekE) 200-day and two yearAnswer: D Difficulty: Moderate29. is a measure of the extent to which a movement in the market index isreflected in the price movements of all stocks in the mark

35、et.A) put-call ratioB) trin ratioC) BreadthD) confidence indexE) all of the aboveAnswer: C Difficulty: Moderate30. Then confidence index is computed from and higher values areconsidered signals.A) bond yields; bearishB) odd lot trades; bearishC) odd lot trades; bullishD) put/call ratios; bullishE) b

36、ond yields; bullishAnswer: E Difficulty: Moderate31. The put/call ratio is computed as and higher values are consideredsignals.A) the number of outstanding put options divided by outstanding call options; bullish or bearishB) thenumber of outstandingput options dividedby outstanding call options;bul

37、lishC) thenumber of outstandingput options dividedby outstanding call options;bearishD) thenumber of outstandingcall options dividedby outstanding put options;bullishE) thenumber of outstandingcall options dividedby outstanding put options;bullishAnswer: A Difficulty: Moderate32. The efficient marke

38、t hypothesis .A) implies that security prices properly reflect information available to investorsB) has little empirical validityC) implies that active traders will find it difficult to outperform a buy-and-hold strategyD) B and CE) A and CAnswer: E Difficulty: Moderate33. Tests of market efficiency

39、 have focused on .A) the mean-variance efficiency of the selected market proxyB) strategies thatwould have provided superior risk-adjusted returnsC) results of actual investments of professional managersD) B and CE) A and BAnswer: D Difficulty: Moderate34. The anomalies literature .A) provides a con

40、clusive rejection of market efficiencyB) provides a conclusive support of market efficiencyC) suggests that several strategies would have provided superior returnsD) A and CE) none of the aboveAnswer: C Difficulty: Moderate35. Behavioral finance argues that .A) even if security prices are wrong it m

41、ay be difficult to exploit themB) the failure to uncover successful trading rules or traders cannot be taken as proof of market efficiencyC) investors are rationalD) A and BE) all of the aboveAnswer: D Difficulty: Moderate36. Markets would be inefficient if irrational investors and actions ifarbitra

42、gers were .A) existed; unlimitedB) did not exist; unlimitedC) existed; limitedD) did not exist; limitedE) none of the aboveAnswer: C Difficulty: Moderate37. If prices are correct and if prices are not correct .A) there are no easy profit opportunities; there are no easy profit opportunitiesB) there

43、are no easy profit opportunities; there are easy profit opportunitiesC) there are easy profit opportunities; there are easy profit opportunitiesD) there are easy profit opportunities; there are no easy profit opportunitiesE) none of the aboveAnswer: A Difficulty: Moderate38. can lead investors to mi

44、sestimate the true probabilities of possible eventsor associated rates of return.A) Information processing errorsB) Framing errorsC) Mental accounting errorsD) Regret avoidanceE) all of the aboveAnswer: A Difficulty: Moderate39. Kahneman and Tversky (1973) report that people and .A) people give too

45、little weight to recent experience compared to prior beliefs; tend to make forecasts that are too extreme given the uncertainty of their informationB) people give too much weight to recent experience compared to prior beliefs; tend to make forecasts that are too extreme given the uncertainty of thei

46、r informationC) 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 informationD) people give too much weight to recent experience compared to prior beliefs; tend to make forecasts that are no

47、t extreme enough given the uncertainty of their informationE) none of the aboveAnswer: B Difficulty: Difficult40. Errors in information processing can lead investors to misestimate .A) true probabilities of possible events and associated rates of returnB) true probabilities of possible eventsC) rate

48、s of returnD) the ability to uncover accounting manipulationE) fraudAnswer: A Difficulty: Moderate41. DeBondt and Thaler (1990) argue that the P/E effect can be explained by .A) forecasting errorsB) earnings expectations that are too extremeC) earnings expectations that are not extreme enoughD) regr

49、et aviodanceE) A and BAnswer: E Difficulty: Moderate42. Barber and Odean (2001) report that men trade frequently than women andthe frequent trading leads to returns.A) less; superiorB) less; inferiorC) more; superiorD) more; inferiorE) none of the aboveAnswer: D Difficulty: Moderate43. Conservatism

50、implies that investors are too in updating their beliefs inresponse to new evidence and that they initially react to news.A) quick; overreactB) quick; under reactC) slow; overreactD) slow; under reactE) none of the aboveAnswer: D Difficulty: Moderate44. If information processing were perfect, many s

51、tudies conclude that individuals would tend to make decision using that information due to .A) less-than-fully rational; behavioral biasesB) fully rational; behavioral biasesC) less-than-fully rational; fundamental riskD) fully rational; fundamental riskE) fully rational; utility maximizationAnswer:

52、 A Difficulty: Moderate45. The assumptions concerning the shape of utility functions of investors differ between conventional theory and prospect theory. Conventional theory assumes that utility functions are whereas prospect theory assumes that utility functions areA) concave and defined in terms o

53、f wealth; s-shaped (convex to losses and concave to gains) and defined in terms of loses relative to current wealthB) convex and defined loses relative to current wealth; s-shaped (convex to losses and concave to gains) and defined in terms of loses relative to current wealthC) s-shaped (convex to l

54、osses and concave to gains) and defined in terms of loses relative to current wealth; concave and defined in terms of wealthD) 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 wealthE) convex and defined in ter

55、ms 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 force prices of identical goods to trade at equal prices. However, empirical evidence suggests that are often mispriced.A) Siam

56、ese Twin CompaniesB) equity carve outsC) closed-end fundsD) A and CE) all of the aboveAnswer: E Difficulty: DifficultEssay Questions47. Compare and contrast the efficient market hypothesis with the school of thought termed behavioral finance.Difficulty: DifficultAnswer:The efficient market hypothesi

57、s posits that investors are fully informed, rational, utility maximizers. Thus, security prices will fully reflect all information available to the investors. If any security becomes mispriced, the collective buying and selling actions of investors will quickly cause prices to change. Given an efficient market, it would be difficult to find a trading rule that would consistently outperform the market. Moreover, failure to uncover profitabl