ASSIGNMENT 2 FIN 403 2024 Technical analysis is based on all of the following assumptions except . A. Market value is determined by the interaction of demand and supply. B. Stocks with strong earnings gains will outperform the market. C. The assumption that though there are minor fluctuations in the market, stock prices tend to move in trends that persist for long periods of time. D. Shifts in demand and supply can be detected sooner or later. You buy a zero-coupon bond for $250.00 and 10 years later sell it for $591.84. What annualized rate of return did you earn? A. 13.67% B. 4.24% C. 9.00% D. 2.36% The breadth of the market indicator . A. Attempts to measure what a broad range of securities is doing as opposed to merely examining a market average. B. Can be used to analyze upturns in the market. C. Compares the advance-declines with the movement of a popular market average to determine if there is divergence between the two. D. All of the above. When is the best time to convert a convertible bond to common stock? A. When the call price exceeds the conversion value B. After the conversion ratio decreases C. When the conversion value is below the pure bond value D. None of the above Under the Dow theory, all of the following represent trends in the market except . A. Daily fluctuations B. Secondary movement C. Primary trends D. Linear trends ASSIGNMENT 2 FIN 403 2024 Which of the following industries is most sensitive to changes in the business cycle? A. The tobacco and alcohol industries B. The automobile and durable goods industries C. The food and pharmaceutical industries D. All of the above are equally sensitive to changes in the business cycle While the Dow Jones Industrial Average may be weighted toward large firms, a(n) __________ indicator may be used to examine all stocks on an exchange. A. Key B. Contrary opinion C. Breadth of the market D. More than one of the above An example of secured debt would be a: A. Contract where two signatures specified how the contract would be paid. B. Contract in which a court kept the contract in its possession to see that nothing would happen to it. C. Contract in which real assets are pledged as security for a loan. D. Debenture Assume a $1,000 Treasury bill is quoted to pay 6% interest over a three-month period. What will be the effective yield? A. 6.09% B. 6.38% C. 3.05% D. 25.53% What is the conversion ratio of a $1,000 bond convertible at $27 per share? The coupon rate is 10 percent and the market rate 12 percent. This company’s common stock is currently trading at $23 per share. A. 37.04 shares B. 43.478 shares C. 83 shares D. 35.2 shares Explain the differences among various concepts of yield such as yield to maturity, yield to call, and anticipated realized yield. Describe the techniques for ASSIGNMENT 2 FIN 403 2024 anticipating changes in interest rates. Explain the efficient market hypothesis and the different forms it can take. Relate the efficient market hypothesis to fundamental and technical analyses. .