Which of the Following Statements Is TRUE

question 21

Multiple Choice

Which of the following statements is TRUE?
I. Stock prices provide signals on how well a company is performing.
II. The stock market is a mechanism that firms use to raise money to buy capital.
III. The stock market provides a mechanism for poorly managed companies to be taken over by more competent managers.

• A) III only
• B) I and II only
• C) I, II, and III
• D) I and III only

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Definitions:

Histogram

A graphical representation of data that groups numbers into ranges, showing the frequency of data within each range via bars.

Trimmed Mean

A method of averaging that removes a specified percentage of the largest and smallest values before calculating the mean, often used to reduce the effect of outliers.

Bootstrap Standard Error

A measure of the variability or dispersion of a statistic's sampling distribution, estimated using the bootstrap resampling method.

Critical Value

A threshold value in hypothesis testing that defines the boundary of the rejection region; values beyond this indicate statistical significance.