Which of the Following Statements Is FALSE

question 90

Multiple Choice

Which of the following statements is FALSE?

• A)Stock markets aggregate the information and views of many different investors.
• B)Only in the relatively rare case in which we have some superior information that other investors lack regarding the firm's cash flows and cost of capital would it make sense to second-guess the market stock price.
• C)In most situations,a valuation model is best applied to tell us something about the value of the firm's stock.
• D)The efficient market hypothesis implies that securities will be fairly priced,based on their future cash flows,given all information that is available to investors.

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Definitions:

Constant-rate

A process or condition that occurs at a steady, unchanging rate over time.

Regressive

Regressive, in economic terms, often refers to a tax system where the tax rate decreases as the taxable amount increases, imposing a greater burden on lower-income individuals.

Marginal Tax Rate

The percentage of an increase in income that is taxed away.

Average Tax Rate

The ratio of the total amount of taxes paid to the total taxable income.