Which One of the Following Statements Is Correct

question 56

Multiple Choice

Which one of the following statements is correct?

• A) The weekend effect states that security prices tend to rise between Friday afternoon and Monday morning.
• B) The market responds immediately to reflect insider information.
• C) Low P/E stocks tend to outperform high P/E stocks on a risk-adjusted basis.
• D) The market fully anticipates the information contained in an earnings announcement prior to the actual announcement.

---

Definitions:

Debt-Ridden Farmers

Farmers who are heavily burdened with debt, often as a result of loans taken out to cover the costs of farming operations.

Foreclosures

Legal process by which a lender takes control of a property due to failure of the borrower to meet the terms of the mortgage.

Virginia Plan

A proposal at the Constitutional Convention that called for a strong central government with a bicameral legislature dominated by the most populous states.

Edmund Randolph

An American attorney and politician who served as the first Attorney General of the United States and the seventh Governor of Virginia.