1. Moving money in and out of the market based on your market expectations is called _____ and tends to lead to returns that are _____ than the overall market return, assuming that the market is relatively efficient.

A. asset allocation; higher

B. asset allocation; lower

C. market timing; higher

D. market timing; lower

E. security selection; higher

2. Which one of the following involves the study of a firm's stock price for the few days surrounding a news announcement?

A. web survey

B. market analysis

C. event study

D auditing review

E. trend study

3. Approximately how many years did it take for the stock market to recover from the bear market of 1929 to 1932?

A. 5

B. 10

C. 15

D. 20

E. 25

4. If the markets are efficient, then why is asset allocation still considered important?

A. because the risk-return relationship must still be considered

B. because market timing is critical in efficient markets

C. because individual security selection is the key to the markets being efficient

D. because asset allocation combines market timing with individual security selection

E. because the majority of market gains tend to occur only over long periods of time

5. Over the time period of 1929 to 1932, the stock market lost approximately _____ percent of its value.

A. 33

B. 40

C. 50

D. 75

E. 90