1. Given what you know about market efficiency, does technical analysis (the study of past price/volume charts in the hopes of predicting future price movements) work?
a. Yes, but only in the weak=form.
b. No. Even weak=form efficiency suggests that technical analysis can not help you predict future stock price movements.
2. Given what you know about market efficiency, can stock analysts consistently determine future price movements and outperform the market?
a. Yes, but only in the weak=form.
b. Yes, but only in the semi=strong=form.
c. Yes. Analysts are smart and can predict the market in any form.
d. No. Analysts are idiots.
3. The longer the maturity of a bond the more its price will change in response to a given change in interest rates. This is called “interest rate risk”.
a. True b. False