Which One of the Following Statements Related to Unexpected Returns

question 45

Multiple Choice

Which one of the following statements related to unexpected returns is correct?

• A) All announcements by a firm affect that firm's unexpected returns.
• B) Unexpected returns over time have a negative effect on the total return of a firm.
• C) Unexpected returns are relatively predictable in the short-term.
• D) Unexpected returns generally cause the actual return to vary significantly from the expected return over the long-term.
• E) Unexpected returns can be either positive or negative in the short term but tend to be zero over the long-term.

---

Definitions:

Demand

The total quantity of a good or service that consumers are willing and able to purchase at various prices during a specific time period.

Equilibrium

A state of balance in a system where supply equals demand, and there is no external force prompting change.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.

Producer Surplus

The difference between what producers are willing and able to sell a good for and the actual price they receive, representing the benefit to sellers.