Finance & Investment Analysis
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A company is deciding between investing in two different projects. Project A has a higher expected return but also a significantly higher standard deviation. Project B has a lower expected return but a lower standard deviation. Which statistical measure would be most useful in determining which project offers the best risk-adjusted return?

  • Variance
  • Expected Return
  • Sharpe Ratio (correct)
  • Standard Deviation

In a perfectly efficient market, technical analysis is a reliable method for achieving consistently above-average returns.

False (B)

Explain how adverse selection can impact the pricing and trading of financial assets, particularly in markets with asymmetric information.

Adverse selection can lead to a 'lemons' problem, where only low-quality assets are offered for sale, driving down prices and potentially causing market failure.

The ________ posits that asset prices fully reflect all available information, making it impossible to consistently achieve above-average returns using publicly available data.

<p>efficient market hypothesis</p> Signup and view all the answers

Match the type of market efficiency with its corresponding description:

<p>Weak Form Efficiency = Prices reflect all past market data. Semi-Strong Form Efficiency = Prices reflect all publicly available information. Strong Form Efficiency = Prices reflect all public and private information. Behavioral Finance = Examines how psychological factors influence market behavior.</p> Signup and view all the answers

Which of the following statements accurately differentiate influenza from the common cold?

<p>The flu season typically spans from December to March, while the common cold can occur at any time of the year, and the flu has a sudden onset with more debilitating symptoms. (D)</p> Signup and view all the answers

Influenza type C is considered highly virulent and is primarily responsible for the major flu outbreaks each year.

<p>False (B)</p> Signup and view all the answers

Describe three key symptoms that differentiate influenza from the common cold, focusing on the typical characteristics of influenza.

<p>Myalgia, non-productive cough, sudden onset and marked aching of limbs.</p> Signup and view all the answers

Unlike the common cold, influenza is often characterized by a ______ cough, and the typical temperature range associated with a flu fever falls between 37.8°C and ______°C.

<p>non-productive, 38.9</p> Signup and view all the answers

Match each symptom with the illness it is most closely associated with:

<p>Moderate-Severe Sore Throat, Exudate = Bacterial Infection Mild-Moderate Sore Throat, Productive Cough = Common Cold High Fever, Non-Productive Cough, Severe Fatigue = Flu</p> Signup and view all the answers

A child has a viral illness and associated aches and fever. Which systemic analgesic is LEAST appropriate?

<p>Aspirin (C)</p> Signup and view all the answers

Local antiseptics have been proven effective against sore throats caused by viral infections.

<p>False (B)</p> Signup and view all the answers

What is the primary concern associated with administering aspirin-containing products to children experiencing viral illnesses?

<p>Reye's syndrome</p> Signup and view all the answers

Although one trial suggests potential benefits, more research is necessary to definitively confirm the effectiveness of _______ in preventing the common cold.

<p>garlic</p> Signup and view all the answers

Exposure to cold weather without adequate clothing directly causes the common cold.

<p>False (B)</p> Signup and view all the answers

Which of the following statements best describes the recommendation for using antitussives (such as codeine or dextromethorphan) for coughs associated with the common cold?

<p>The efficacy of antitussives in treating coughs associated with colds is questionable, and they are generally not recommended. (D)</p> Signup and view all the answers

Which of the following statements best reflects the current understanding of non-pharmacologic treatments for the common cold?

<p>Increased humidification, saline nasal sprays, and salt gargles primarily aim to alleviate symptoms such as irritated mucosal membranes and sore throats. (C)</p> Signup and view all the answers

The primary goal in treating a cold is not to cure it, but to prevent its ______ and alleviate bothersome symptoms.

<p>transmission</p> Signup and view all the answers

Explain why antibiotics are not a recommended treatment for the common cold and elaborate on the potential risks associated with their use in such cases.

<p>Antibiotics target bacteria, while colds are caused by viruses; using antibiotics inappropriately can lead to antibiotic resistance and other adverse effects.</p> Signup and view all the answers

A patient reports using high doses of Vitamin C and Echinacea at the first sign of a cold. Based on current evidence, how should a healthcare provider respond?

<p>Advise that while some studies suggest a possible mild benefit, these supplements are generally not effective in treating or shortening the duration of a cold for most people. (A)</p> Signup and view all the answers

Which of the following scenarios would LEAST likely benefit from the application of blockchain technology?

<p>A highly regulated financial institution needing to reconcile transactions processed daily. (D)</p> Signup and view all the answers

A smart contract on a blockchain is immutable, meaning that once deployed, its code can never be altered, even by its creators.

<p>False (B)</p> Signup and view all the answers

Explain the concept of a 'Byzantine Fault' in the context of distributed systems and how consensus mechanisms like Practical Byzantine Fault Tolerance (PBFT) address it.

<p>A Byzantine Fault refers to scenarios where components of a distributed system may fail and provide incorrect information to other components i.e. lying. PBFT addresses this by using a voting system where nodes must agree on a state even if a certain number of nodes are faulty.</p> Signup and view all the answers

In Proof of Stake (PoS) systems, validators are often selected based on the amount of cryptocurrency they hold and are willing to _______ as collateral.

<p>stake</p> Signup and view all the answers

Match the following cryptographic terms with their correct definitions.

<p>Hashing = A one-way function that produces a fixed-size output from an input of any size. Public Key Cryptography = A system that uses pairs of keys: a public key for encryption and a private key for decryption. Digital Signature = A cryptographic mechanism used to verify the authenticity and integrity of a message or document. Merkle Tree = A tree data structure in which each non-leaf node is the hash of its children nodes.</p> Signup and view all the answers

A country's central bank wants to decrease inflation. Which of the following actions would be most effective, assuming other factors remain constant?

<p>Increasing the federal funds rate by selling government securities. (B)</p> Signup and view all the answers

The efficient market hypothesis (EMH) implies that consistently achieving above-average returns is possible through insider information.

<p>False (B)</p> Signup and view all the answers

Consider a scenario where a perfectly competitive firm is producing at a level where its marginal cost (MC) exceeds its marginal revenue (MR). To maximize its profits (or minimize losses), the firm should:

<p>Reduce production to decrease marginal cost and increase marginal revenue. (C)</p> Signup and view all the answers

How does quantitative easing (QE) differ from traditional monetary policy, especially in terms of the assets purchased by a central bank?

<p>Traditional monetary policy typically involves buying or selling government bonds to influence short-term interest rates. QE, on the other hand, may involve a central bank purchasing a wider range of assets, including long-term government bonds or even corporate bonds, to inject liquidity directly into specific markets and lower long-term borrowing rates.</p> Signup and view all the answers

A decline in aggregate demand, leading to lower output and prices, characterizes a ________. This can result in increased unemployment if not addressed.

<p>recession</p> Signup and view all the answers

In a perfectly competitive market, individual firms have the ability to influence the market price.

<p>False (B)</p> Signup and view all the answers

Match the following economic indicators with their primary signals about the economy:

<p>Consumer Price Index (CPI) = Measures the average change over time in the prices paid by urban consumers for a basket of consumer goods and services. Gross Domestic Product (GDP) = Represents the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. Unemployment Rate = Indicates the percentage of the labor force that is jobless. Purchasing Managers' Index (PMI) = Is an indicator of the economic health of the manufacturing sector.</p> Signup and view all the answers

Explain how the entry and exit of firms affect the long-run equilibrium in a perfectly competitive market and its relationship with economic profit.

<p>In the long run, if firms are making positive economic profits, new firms will enter the market, increasing supply, decreasing price, and reducing profits. Conversely, if firms are experiencing losses, some will exit the market, decreasing supply, increasing price, and reducing losses until economic profits are driven to zero.</p> Signup and view all the answers

A market structure characterized by a single seller, selling a unique product in the market, is a ________.

<p>monopoly</p> Signup and view all the answers

Match the following characteristics with the correct market structure:

<p>Perfect Competition = Many firms, identical products, free entry and exit Monopoly = Single firm, unique product, barriers to entry Oligopoly = Few firms, differentiated or identical products, significant barriers to entry Monopolistic Competition = Many firms, differentiated products, relatively free entry and exit</p> Signup and view all the answers

In a perfectly competitive market, a firm's marginal cost (MC) curve above the average variable cost (AVC) curve represents:

<p>The firm's supply curve, indicating the quantity the firm is willing to supply at different prices. (A)</p> Signup and view all the answers

A monopolistically competitive firm maximizes profit by producing where marginal cost equals marginal revenue and always earns economic profit in the short run.

<p>False (B)</p> Signup and view all the answers

Explain how the Herfindahl-Hirschman Index (HHI) is used to measure market concentration and discuss its limitations.

<p>The HHI measures market concentration by summing the squares of the market shares of each firm in the industry. A high HHI indicates high concentration and potentially less competition. Limitations include that it does not directly measure competition, ignores potential competition, and is sensitive to market definition.</p> Signup and view all the answers

In game theory, a strategy that is optimal regardless of what the other player does is called a ______ strategy.

<p>dominant</p> Signup and view all the answers

Match the following market structures with their key characteristics:

<p>Perfect Competition = Many firms, identical products, easy entry and exit Monopoly = Single firm, unique product, barriers to entry Oligopoly = Few firms, differentiated or homogeneous products, strategic interaction Monopolistic Competition = Many firms, differentiated products, relatively easy entry and exit</p> Signup and view all the answers

Why is tilting the head backward towards the ceiling considered an incorrect method for administering nasal drops?

<p>It facilitates the swallowing of the drops. (A)</p> Signup and view all the answers

Antibacterial and anesthetic lozenges and sprays are the primary treatment for viral sore throats because they directly target and eliminate viral pathogens.

<p>False (B)</p> Signup and view all the answers

List three nasal care instructions from the text.

<ol> <li>Wash hands frequently after nose blowing.</li> <li>Avoid sharing hard towels.</li> <li>Try to avoid touching your nose.</li> </ol> Signup and view all the answers

Viral infections account for between 70% and 90% of all _______ ceases.

<p>sore throat</p> Signup and view all the answers

When should a patient experiencing acute sinus symptoms be referred to a healthcare professional?

<p>If symptoms fail to respond to over-the-counter medications. (D)</p> Signup and view all the answers

A risk-neutral investor is presented with two investment options: Option A has a guaranteed return of 5%, while Option B has a 50% chance of returning 15% and a 50% chance of returning -5%. Which option will the risk-neutral investor prefer?

<p>The investor will be indifferent between Option A and Option B. (C)</p> Signup and view all the answers

According to the Capital Asset Pricing Model (CAPM), a stock with a beta of 1 will always have an expected return equal to the market rate of return, irrespective of the risk-free rate.

<p>False (B)</p> Signup and view all the answers

Describe how you would use a binomial tree model to price an American option, highlighting the key differences in the valuation process compared to European options.

<p>To price an American option using a binomial tree, you would work backward from the expiration date, calculating the option's value at each node. At each node, you would compare the value of holding the option to its intrinsic value if exercised immediately. The key difference from European options is that you take the maximum of these two values, reflecting the American option's early exercise feature.</p> Signup and view all the answers

In the context of portfolio management, the Sharpe Ratio is used to measure the risk-adjusted return of an investment portfolio, calculated as the excess return over the __________ divided by the portfolio's standard deviation.

<p>risk-free rate</p> Signup and view all the answers

Match the following terms related to fixed income securities with their corresponding definitions:

<p>Duration = A measure of the sensitivity of the price of a fixed-income security to changes in interest rates. Convexity = A measure of the curvature in the relationship between bond prices and bond yields. Yield to Maturity (YTM) = The total return anticipated on a bond if it is held until it matures. Credit Spread = The difference in yield between a corporate bond and a government bond with a similar maturity.</p> Signup and view all the answers

Flashcards

What causes the Flu?

Caused by RNA viruses; Types A and B are most virulent and symptomatic, type C produces mild cold-like symptoms.

When is flu season?

The flu typically occurs between December and March.

Typical Flu Symptoms

Sudden onset with shivering, chills, malaise, aching limbs, insomnia, fatigue, and a non-productive cough.

Flu vs. Cold: Key differentiators

Marked aching of limbs, non-productive cough, and moderate-severe fatigue.

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Flu Symptoms

Fever (37.8°C-38.9°C), nonproductive cough, moderate-severe fatigue and loss of appetite.

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Cause of the common cold

Colds are caused by viruses, not by being cold.

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Antibiotics for colds?

Antibiotics are ineffective against viral infections like the common cold.

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Treatment Goals for Colds

Because there is no cure for colds, the goal is to reduce bothersome symptoms.

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Non-drug Therapy for Colds

Increase fluid intake, get adequate rest and maintain a nutritious diet.

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Saline for Cold Symptoms

Moisten membranes, loosen mucus, and soothe throats using saline sprays/drops and salt gargles.

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Missing Term

The flashcard term is missing.

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Flashcard

A structured way to organize information for learning.

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Testing Effect

Presenting questions or prompts that require active recall from memory.

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Hint

A brief clue designed to jog the memory.

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Mnemonic

A technique to aid memory, often using associations or vivid images.

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Local Anesthetics

Offer temporary relief for sore throats, some containing antiseptics, menthol, or camphor.

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Vitamin C for Colds

High doses (over 1g/day) may slightly reduce cold frequency/severity, but evidence is limited.

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Systemic Analgesics

Effective for aches/fever with colds. Avoid aspirin in children due to Reye's syndrome risk.

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Antitussives for Colds

Not generally recommended for colds due to questionable efficacy, especially with productive coughs.

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Garlic and Colds

Limited evidence suggests garlic may prevent colds; further research is needed.

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Hand Hygiene & Nose Blowing

Wash often, especially post-nose blowing, to prevent spreading germs.

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Sharing Towels

Avoid sharing towels to minimize the risk of spreading infection.

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Avoid Touching Nose

Touching your nose can transfer germs from your hands.

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Nasal Drop Position

Administer with head downward for direct nasal passage delivery.

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Sore Throat Treatment Aim

Soothe discomfort while the infection naturally resolves.

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Flu cause

RNA viruses, mainly types A and B, cause the flu.

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Flu Season Timing

Flu season mainly occurs during the winter months, specifically December to March.

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Main Flu Symptoms

Aches, dry cough, fatigue.

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Flu vs. Cold: Intensity

Flu has worse aches and fatigue.

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Common Flu Symptoms

Fever, cough, fatigue, appetite loss.

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What is a Cold?

Illness caused by viruses with symptoms like cough, fatigue, and fever.

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Non-Drug Cold Therapy

Rest, fluids, and nutritious food, to aid in recovery.

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Cold Treatment Goals

Reduce severity and duration, using saline etc.

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Antibiotics and Colds

These are ineffective against colds.

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Purpose of Saline for Colds

Soothe and moisten membranes, loosen congestion.

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