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11. A well-functioning capital market is characterized by which of the following? a. Large bid-ask...

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11. A well-functioning capital market is characterized by which of the following? a. Large bid-ask spreads b. High liquidity c. Slow price-adjustments to the release of new information 12. An investor bought a stock for $50 a month ago and it is currently selling for $45. An order to sell the stock if it drops to $40 is a: a. stop buy order. b. stop loss order. c. short sale order. 13. Which of the following most appropriately reflects the Top-down' approach to security analysis? a. Economic analysis Industry Analysis Fundamental Analysis b. Fundamental Analysis - Technical Analysis- Index analysis c. Book Value Analysis - Market Analysis - Intrinsic Analysis 14. An investor purchases 100 shares of stock priced at $75 per share using a maintenance margin of 50%. If the stock drops to $50 per share, what is the new margin? 75% 50% a. b. 15. Earnings for Scrooge Gloves, Inc. are expected to grow at a rate of 32% for the next 2 years. Following the first two years, the growth rate is expected to drop to a sustainable 4% per year indefinitely. The most recent dividend was $0.75 and the required rate of return is 9.0%. The current value of the stock is closest to a. $12.4.5 b. $24.90 c. $27.80 2

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