Questions from General Investment

Q: You look at a large number of firms that announced higher-

You look at a large number of firms that announced higher-than-expected sales growth and notice that the stocks of these firms were rising quickly prior to these public announcements. Does that violat...

Q: Briefly define each of the following terms, and describe how it

Briefly define each of the following terms, and describe how it can affect investors’ decisions. a. Loss aversion b. Representativeness c. Narrow framing d. Overconfidence e. Biased self-attribution

Q: Describe how representativeness may lead to biases in stock valuation.

Describe how representativeness may lead to biases in stock valuation.

Q: Briefly describe how technical analysis is used as part of the stock

Briefly describe how technical analysis is used as part of the stock valuation process. What role does it play in an investor’s decision to buy or sell a stock?

Q: Describe each of the following approaches to technical analysis, and note

Describe each of the following approaches to technical analysis, and note how it would be used by investors. a. Confidence index b. Arms index c. Odd-lot trading d. Charting e. Moving averages f. On-b...

Q: Using the bond returns in Table 10.1 as a basis

Using the bond returns in Table 10.1 as a basis of discussion: a. Compare the total returns on Treasury bonds during the 1970s with those produced in the 1980s. How do you explain the differences? b....

Q: Identify and briefly describe each of the following types of bonds.

Identify and briefly describe each of the following types of bonds. a. Agency bonds b. Municipal bonds c. Zero-coupon bonds d. Junk bonds e. Foreign bonds f. Collateralized mortgage obligations (CMOs)...

Q: “Treasury securities are guaranteed by the U.S. government

“Treasury securities are guaranteed by the U.S. government. Therefore, there is no risk in the ownership of such bonds.” Briefly discuss the wisdom (or folly) of this statement.

Q: Terri Allessandro has an opportunity to make any of the following investments

Terri Allessandro has an opportunity to make any of the following investments. The purchase price, the lump-sum future value, and the year of receipt are given below for each investment. Terri can ear...

Q: Select the security in the left-hand column that best fits

Select the security in the left-hand column that best fits the investor’s desire described in the right-hand column. a. Five-year Treasury note b. A bond with a low coupon and a long maturity c. Yanke...