Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)If the profit opportunities from having private information are large,other individuals will attempt to gain the expertise and devote the resources needed to acquire it.
• B)When private information is relegated to the hands of a relatively small number of investors,these investors may be able to profit by trading on their information.
• C)When a buyer seeks to buy a stock,the willingness of other parties to sell the same stock suggests that they value the stock differently.
• D)Since stock markets aggregate the information and views of many different investors,we expect the stock price to react slowly to new publicly available information as the investors continue to trade until a consensus is reached as to the new value of the stock.

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Definitions:

Order Costs

Expenses related to placing an order for goods or services, including production or acquisition and delivery costs.

Carrying Cost

Expenses associated with holding inventory, including storage, handling, insurance, and opportunity costs.

Annual Demand

The total quantity of a product or service that consumers are willing and able to purchase in a given year.

Orders

Instructions given to buy or sell securities or other types of financial assets.