Which One of the Following Is Most Indicative of a Totally

question 50

Multiple Choice

Which one of the following is most indicative of a totally efficient stock market?

• A)extraordinary returns earned on a routine basis
• B)positive net present values on stock investments over the long-term
• C)zero net present values for all stock investments
• D)arbitrage opportunities which develop on a routine basis
• E)realizing negative returns on a routine basis

---

Definitions:

Variable Overhead

Costs that vary with production volume, such as utilities or materials used in production processes.

Fixed Overhead

A set of costs that do not vary with production volume, including salaries, rent, and insurance.

Sales Commission

Compensation paid to sales employees as a percentage of the sales they generate, meant to incentivize higher sales.

Incremental Analysis

A decision-making tool used in finance and accounting to determine the cost and benefit changes resulting from a specific business decision.