b GESTÃO FINANCEIRA II Lic.

- Undergraduate Degree

QUIZ (17.10.2016)
Name: ……………………………………………………………………………………………. Number: ………………………..

Answer each question by drawing a circle around the letter that, in your opinion,
corresponds to the correct solution.

1- The statement that stock prices follow a random walk implies that:
I) the correlation coefficient between successive price changes (autocorrelation) is
not significantly different from zero;
II) successive price changes are positively related;
III) successive price changes are negatively related;
IV) the autocorrelation coefficient is positive

a) I only
b) II only
c) II and III only
d) IV only

2-Which of the following is false regarding weak-form efficiency?

I) If markets are efficient in the weak form, then it is impossible to make consistently
superior profits by using trading rules based on past returns.
II) If markets are efficient in the weak form, then prices will adjust immediately to
public information.
III) If markets are efficient in the weak form, then prices reflect all information.

a) I only
b) II only
c) II and III only
d) III only

3- Strong-form efficiency implies that:

I) Stock prices reflect all available information.
II) An investor can always rely on technical analysis;
III) An insider or corporate officer cannot outperform the market by trading on the
inside information
b GESTÃO FINANCEIRA II Lic. - Undergraduate Degree

a) I only
b) II only
c) III only
d) I and III only

4- One possible reason that shareholders often insist on higher dividends is

a) They agree with Miller and Modigliani.
b) The capital gains tax disadvantage.
c) The stock market is efficient.
d) They do not trust managers to spend retained earnings wisely.

5- Company X has 200 shares outstanding. It earns $1,650 per year and expects to pay all of it
as dividends. If the firm expects to maintain this dividend forever, calculate the stock price
after the dividend payment. (The required rate of return is 12%.)
a) $24
b) $224
c) $176
d) $68,75

6- According to behavioral finance, investors prefer dividends because:

a) Investors prefer the discipline that comes from spending only the dividends.
b) Dividends generate lower taxes.
c) the stock market is efficient.
d) dividends provide a tax deduction.