Which of the Following Is True

question 7

Multiple Choice

Which of the following is true?

• A) because of high capital cost, rail must have a large volume of traffic to justify the expense
• B) water transport requires low rates of energy per ton mile moved
• C) operating costs per ton mile tend to be low for trucks
• D) a and b above
• E) b and c above.

Understand the principles of the efficient market hypothesis (EMH) and its implications for stock prices and investors' actions.

Differentiate between moral hazard and other risk-related terms in insurance and finance contexts.

Comprehend the concept of fundamental analysis and its role in evaluating a stock's valuation.

Identify and understand the impact of news and corporate actions on stock prices under the EMH.

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Definitions:

Complementary Goods

Goods that are typically consumed together, such that the demand for one increases when the price of the other decreases.

Substitute Goods

Goods that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Independent Goods

Products or services whose demand is not directly related to the demand for other goods; their consumption or purchase does not affect the consumption or purchase of other products.

Quantity Supplied

The amount of a good that producers are willing to sell at a given price over a specified period.