Which of the following statement is correct?

		DJIA is not value weighted
		None of the above
		If the Efficient Markets Hypothesis is NOT true, all stocks are correctly priced
		Common shares is not a financial asset
		Common shares is not a financial asset

Which of the following statement is NOT correct?

		None of the above
		Price Impact is not a trading cost for investors when trading common stocks
		There is a decrease in number of IPOs after 2000
		12b-1 Fee is not a trading cost for investors when trading common stocks
		Mutual funds investors pay taxes on capital gain and dividends

Solutions

Expert Solution

Q1:

option A: DJIA is not a value weighted index unlike S&P 500. Whereas it is a price weighted index in which the value is derived from price per share of stocks

Q2:

option B: Price Impact is not a trading cost for investors when trading common stocks

----When trading common stocks, the price impact is considered as a trading cost. All the other options are correct.

jeff jeffy answered 2 years ago

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