a 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-If capital markets are efficient, then the sale or purchase of any security at the prevailing
market price is generally:
a) A positive-NPV transaction.
b) A zero-NPV transaction.
c) A negative-NPV transaction.
d) No general trend exists for such transactions.

2-Which of the following is a statement of 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 market efficiency states that the market incorporates all information into stock
prices. Strong-form efficiency implies that:
I) An investor can only earn risk-free rates of return;
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
a) I only
b) II only
c) III only
d) I, II and III
a GESTÃO FINANCEIRA II Lic. - Undergraduate Degree

4- The dividend-irrelevance proposition of Miller and Modigliani depends on the following

relationship between investment policy and dividend policy:
a) Changes in investment policy will alter dividend policy.
b) Changes in dividend policy will alter investment policy.
c) Investment policy is independent of dividend policy.
d) Dividends are tax-deductible and investments are depreciable.

5- Company X has 100 shares outstanding. It earns $1,000 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) $88
b) $112
c) $83.3
d) $12

6- The rightist position is that the market will reward firms for having:
a) A high dividend yield.
b) A low dividend yield.
c) Good management, regardless of dividend yield.
d) A zero payout policy.