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Psychologists have found that people tend to be ____ in their own judgments.
A) underconfident
B) overconfident
C) indecisive
D) insecure
Answer: B
Diff: 1 Type: MC Page Ref: 154
Skill: Recall
Objective List: 7.2 Determine how information in the market affects asset prices
____ and ____ may provide an explanation for stock market bubbles.
A) Overconfidence; social contagion
B) Underconfidence; social contagion
C) Overconfidence; social isolationism
D) Underconfidence; social isolationism
Answer: A
Diff: 1 Type: MC Page Ref: 154
Skill: Recall
Objective List: 7.2 Determine how information in the market affects asset prices
7.6 Web Appendix: Evidence on the Efficient Market Hypothesis
If a mutual fund outperforms the market in one period, evidence suggests that this fund is
____.
A) highly likely to consistently outperform the market in subsequent periods due to its superior
investment strategy
B) likely to under-perform the market in subsequent periods to average its overall returns
C) not likely to consistently outperform the market in subsequent periods
D) not likely to outperform the market in any subsequent period
Answer: C
Diff: 2 Type: MC Page Ref: 7A.1- 1 - 2
Topic: Questions for Web Appendix on the Efficient Market Hypothesis
Skill: Recall
Objective List: Appendix: Evidence on the Efficient Market Hypothesis
Studies of mutual fund performance indicate that mutual funds that outperformed the market
in one time period usually ____.
A) beat the market in the next time period
B) beat the market in the next two subsequent time periods
C) beat the market in the next three subsequent time periods
D) do not beat the market in the next time period
Answer: D
Diff: 1 Type: MC Page Ref: 7A.1- 1 - 2
Topic: Questions for Web Appendix on the Efficient Market Hypothesis
Skill: Recall
Objective List: Appendix: Evidence on the Efficient Market Hypothesis