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finance and account:issues in finance英格兰硕士assignment道选择题

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Question 1 

Which of the following statement BEST describes the market for corporate control according to Jarrell, Brickley and Netter (1988)?
Answer 
a. Market for the right to control the management of corporate resources
b. Market for the most effective managers in compete for corporate resources
c. Market for a small group of investors purchasing a company using a high percentage of debt financing
d. Market for US firms and foreign firms buying each other

 

5 points 
Question 2 
In Bakshi, Cao and Chen’s paper, the correlation between share price changes and call option price changes is
Answer 
a. Constant and somewhere in between zero and one.
b. Constant and exactly equal to zero.
c. Time varying.
d. Constant and exactly equal to one.
e. Proportional to the stock’s beta.

 

5 points 
Question 3 
Which of the following statements is untrue about volatility:
Answer 
a. When calculating the multiple period variance, the square root of time rule assumes that asset returns are independent and identically distributed
b. The “ghost feature” in historical volatility models arises when a large return event falls out of the moving average
c. Volatility only exists in the context of a model
d. Volatility is defined as the annualised dispersion parameter in the model used for the underlying returns. 
e. In historical volatility models, the expected value of the standard deviation is the same as the squared root of the expected variance of asset returns

 

5 points 
Question 4 
Hayeck* asked which of the following questions;
[*Source: F.A. Hayek, ‘The Use of Knowledge in Society’, American Economic Review, 35, 4, Sept. 1945: 520.]
Answer 
a. “How does one effectively aggregate disparate pieces of information that are spread among many different individuals, information that in its totality is needed to solve a problem?”
b. “How does one find an optimal price in a market where bets are spread among many different individuals, information that in its totality is needed to solve a problem?”
c. “How does the fact that there is one price for any commodity ... bring about the solution which ... might have been arrived at by one single mind possessing all the information which is, in fact, dispersed among all the people involved in the process?
d. None of the above

 

5 points 
Question 5 
Which of the following statements about large order execution is correct:
Answer 
a. Immediate execution can reduce the market price impact of the order
b. An “upstairs” broker-dealer is less useful with this type of execution as they generally deal with small orders
c. Information leakage is not commonly associated with this type of execution
d. Execution risk increases sharply with time to execution
e. Slicing up the order might increase liquidity impact

 

5 points 
Question 6 
Which of the following statements about the Roll (1984)’s model is incorrect:
Answer 
a. The model is originally applied in dealer markets in which all trades are conducted through dealers
b. The effect of the bid-ask bounce is commonly called as the market microstructure noise
c. The model assumes a constant trading cost for each transaction
d. The effective bid-ask spread can be directly computed from the first-order auto-covariance of price changes
e. The variations of transaction price changes are not affected by the bid-ask spread

 

5 points 
Question 7 
To whom does a director of a company listed on the London Stock Exchange (LSE) need to inform of his insider transactions?
Answer 
a. His/her company
b. The LSE
c. His bank
d. a and b
e. a and c

 

5 points 
Question 8 
Which of the following statements about market price impact is incorrect:
Answer 
a. Uninformed traders tend to trade at better prices than informed traders
b. A large order causes a larger price impact than a small order
c. The transaction costs of smaller capitalised stocks are generally lower than those of larger capitalised stocks
d. Market makers for smaller cap stocks are typically subject to a higher degree of information asymmetry and therefore are less willing to provide liquidity

 

5 points 
Question 9 
Which of the following statements is true;
Answer 
a. Prediction markets always work better than forecasting applications in recent examples in the sport and entertainment markets
b. Prediction markets have never worked better than forecasting applications in recent examples in the sport and entertainment markets
c. Whilst prediction markets may yet prove to be useful, it would seem the enthusiasm for their predictive prowess has outpaced the evidence in recent examples taken from the sport and entertainment markets
d. None of the above.

 

5 points 
Question 10 
Which of the following statements about the limit order market is incorrect:

Answer 
a. A market order is said to “walk up the book, if their size is larger than the size available at the corresponding best bid or ask side
b. The set of executed limit orders held by the system constitutes the limit order book 
c. In the limit order markets, limit orders commonly serve as the function of providing liquidity while market orders consume liquidity
d. Limit orders is the instruction to trade at the best price without violating the limit price condition
e. Limit order markets are the primary trading mechanism in the majority of security exchanges around the world

 

5 points 
Question 11 
Which of the following statements about transaction data is incorrect:
Answer 
a. Price changes often fall on a small number of possible outcomes
b. Transaction prices tend to follow a random walk model; past returns are uncorrelated with future price changes
c. Trading volume generally displays clear intraday patterns; trading volume tends to peak in the morning after the opening, decline at lunchtime and increase towards the close
d. Transaction data provides details about the behaviours of prices and trading volume at intraday level

 

5 points 
Question 12 
In Bakshi, Cao and Chen’s paper, an option violation for a European call on a stock occurs if:
Answer 
a. The time interval between successive trades is too long.
b. The share and option prices move in opposite direction.
c. The underlying shares cease to trade before expiry.
d. the price differs from that given by the Black-Scholes-Merton model.
e. The option expires out of the money.

 

5 points 
Question 13 
Which of the following is NOT a research challenge in the area of corporate restructuring as outlined by Singh (1993)?
Answer 
Strategic options when evaluating the choices to be made in responding to an ever-changing environment
Trading off theoretical abstraction for institutional detail
The pursuit of partial models versus development of a comprehensive theory of restructuring
Defining strategically meaningful resource questions

 

5 points 
Question 14 
Which of the following is NOT an example of corporate restructuring as discussed by Bowman and Singh (1993)?
Answer 
a. Technological restructuring
b. Portfolio restructuring
c. Financial restructuring
d. Organizational restructuring

 

5 points 
Question 15 
Which of the following statements about market liquidity is incorrect:
Answer 
a. Investors whose orders need to be executed immediately have to accept inferior prices
b. Liquidity may depend on who I am
c. Dealers are more likely to provide liquidity when market volatility is low
d. Trading in illiquid market take time
e. A large trade has a small price impact in illiquid market

 

5 points 
Question 16 
Firms can employ several types of methods to resist a particular bidder in a hostile takeover. Which of the following strategies is NOT a type of method in resisting a takeover attempt?
Answer 
a. Winner’s Curse
b. White Knight
c. PacMan Defense
d. White Squire

 

5 points 
Question 17 
Which of the following statements best describes how betting markets work?
Answer 
a. Based on the “Efficient Markets Hypothesis”, betting markets are created by simply averaging every participants opinion
b. Based on the “Efficient Markets Hypothesis”, betting markets rely on the law of large numbers before they can operate
c. Betting markets aggregate all available information to produce best estimate, not least because those who know, and are best able to process the information, bet the most. Based on the ‘Efficient Markets Hypothesis’, the idea is that markets accurately incorporate all relevant information
d. None of the above

 

5 points 
Question 18 
When an insider has superior information trade shares of his/her company, all else equal:
Answer 
a. The abnormal return following a purchase transaction should be negative and the abnormal return following a sales transaction should be positive. 
b. The abnormal return following a purchase transaction should be positive and the abnormal return following a sales transaction should also be positive. 
c. The abnormal return following a purchase transaction should be positive and the abnormal return following a sales transaction should be negative. 
d. The abnormal return following a purchase transaction should be negative and the abnormal return following a sales transaction should be also negative.
e. The abnormal return following a purchase transaction should be higher than the abnormal return following a sales transaction.

 

5 points 
Question 19 
Which of the following is considered by the UK Misuse of Information Act as insiders’ information?
Answer 
a. Material
b. Current
c. Reliable
d. Not available to the market
e. All of the above

 

5 points 
Question 20 
Which of the followings is (are) not considered as cost of insider trading?
Answer 
a. More volatile stock prices
b. Less informative stock prices
c. Increase in market liquidity
d. All of the above
e. None of the above
 
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论文关键字:finance and account issues in finance 英格兰硕士硕士assignment 道选择题