Financial Theory FAQs

  1. What is the difference between positive and normative economics?

  2. What is the difference between arbitrage and speculation?

  3. What is finance?

  4. How does a company switch from one stock exchange to another?

  5. How can I use layaway plans for budgeting?

  6. How do open market operations affect the U.S. money supply?

  7. According to the CAPM, the expected return on a stock, that is part of a portfolio, will depend on all of the following except:

  8. A formula timing plan which consists of periodic purchases of a fixed dollar amount of an investment company regardless of price is known as:

  9. How do I know when to "rebalance" my investments?

  10. Why is Game Theory useful in business?

  11. What's the difference between consumer confidence and consumer sentiment?

  12. What is the difference between systemic risk and systematic risk?

  13. What does it mean when futures prices are in contango?

  14. Do speculators have a destabilizing effect on the financial system?

  15. What is a permanent portfolio?

  16. Does the balance sheet always balance?

  17. The conduit theory...

  18. What is moral hazard?

  19. Which statement(s) is/are FALSE about market risk?

  20. Which statement is FALSE about a prospectus issued under the Securities Act of 1933?

  21. What currency is affected by the interest rate decisions of the Bank of England (BoE)?

  22. Do noise traders have any long-term effect on stock prices?

  23. What is the "random walk theory" and what does it mean for investors?

  24. What is an efficient market and how does it affect individual investors?

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