Which of the Following Is the Best Definition of an Information

question 148

Multiple Choice

Which of the following is the best definition of an information content effect?

• A) The market's reaction to a change in corporate dividend payout.
• B) Idea that individual investors can undo corporate dividend policy by reinvesting dividends or selling shares of stock.
• C) Date two business days before the date of record, establishing those individuals entitled to a dividend.
• D) Payment made out of a firm's earnings to its owners, either in the form of cash or stock.
• E) Payment made by a firm to its owners from sources other than current or accumulated earnings.

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Definitions:

Expected Utility Maximizer

An economic theory that assumes individuals choose among risky alternatives in such a way as to maximize their expected utility.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Contingent Commodity Bundles

A theoretical concept in economics, referring to a collection of goods or services whose provision is dependent on specific conditions or states of the world.

Probability

The measure of the likelihood that an event will occur, expressed between 0 and 1.