Orrin Mines Iron Ore,which He Sells to Thorin,who Turns Iron

question 121

Multiple Choice

Orrin mines iron ore,which he sells to Thorin,who turns iron ore into steel.The steel is sold to Gorin,who turns the steel into battle axes.The battle axes are sold by a merchant in the city to adventurers.Which of the following would be considered a final good?

• A) the iron ore
• B) the steel
• C) the battle axes sold to the merchant
• D) the battle axes sold to the adventurers

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Definitions:

Information Content Effect

The impact of news announcements on stock prices, reflecting changes in investor perceptions.

Efficient Markets Hypothesis

The theory that financial markets are "efficient" in reflecting information about the prices of securities, meaning that existing share prices always incorporate and reflect all relevant information.

Residual Dividend Approach

A policy for setting dividends based on a firm's residual or leftover earnings after financing planned capital expenditures.