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15.
Suppose a mutual fund that invests in bonds purchased a bond when its yield to maturity is higher than the coupon rate. The investor should expect the bond’s price to:
a. exceed the face value at maturity
b. increase over time, reaching par value at maturity
c. decline over time, reaching par value at maturity.
d. be less than the face value at maturity.
20. The weak form of the efficient market hypothesis implies that:
a. No one can achieve abnormal returns using market information.
b. Insiders, such as specialists and corporate board members, cannot achieve abnormal returns on average.
c. Investors cannot achieve abnormal returns, on average, using technical analysis, after adjusting for transaction costs and taxes.
d. All of the above.