322-3

Information asymmetries cannot be eliminated by government regulation of markets.  

A) True  
B) False

The best estimate of an asset's current fundamental value is its market price.  

A) True  
B) False

In markets with asymmetric information problems, it is possible for "plums" to drive out "lemons."  

A) True  
B) False

The P-E ratio for a firm relates the firm's current stock price to its earnings in the past 12 months and appears in many daily newspapers.  

A) True  
B) False

The additional stocks in the S&P 500 are the shares at 40 utility, 40 transportation, and 40 financial company stocks not included in the S&P 400.  

A) True  
B) False

In addition to research studies on the performance and financial condition of businesses, Moody's also:  

A) assigns stock prices to firms.  
B) offers training seminars for credit analysts.  
C) finances for the Federal Reserve.  
D) none of the above  
E) A and B only

Sources of information that may help investors make decisions on the purchase of financial securities include:  

A) Moody's and Standard and Poor's.  
B) The Federal Reserve Board.  
C) The Securities and Exchange Commission (SEC).  
D) all of the above  
E) none of the above

The law that requires trade associations to register with the SEC is called:  

A) The Securities Exchange Act.  
B) The Maloney Act.  
C) The Investment Advisers Act.  
D) Regulation FD.  
E) none of the above

The Sarbanes Oxley Accounting Practices Act (SARBOX), a response to the trouble that Enron and other widely publicized corporate scandals caused, was signed into law in:  

A) 2000.  
B) 2007.  
C) 1995.  
D) none of the above  
E) all of the above

A comprehensive U.S. stock-index would be:
 
A) FTSE.  
B) Wilshire 5000.  
C) Moody's.  
D) none of the above  
E) all of the above