1. Which of the following statements is most correct?
The primary difference between spot and future markets is the timing of the transfer of the commodity.
The primary difference between money and capital markets is the length of the investment period.
Sometimes stocks prices exhibit short-term momentum and/or long-term reversals.
The NYSE is an example of a physical location exchange market.
All of the answers are correct.
2. Which of the following statements is false?
In the event of a bankruptcy, bondholders stand first in line to receive any cash they are owed.
The value of a stock depends on the size, timing, and risk of its dividends.
Shareholders are responsible for repaying the firm’s debt.
Ethics and stock price maximization are generally consistent with each other.
Bankruptcies are good for bondholders because they get their money back faster through liquidation.