If the Market Is Efficient with Respect to Accounting Information,which

question 5

Multiple Choice

If the market is efficient with respect to accounting information,which of the following statements is true?

• A) Accounting reports are useless to investors.
• B) It is impossible to 'beat the market' using only accounting information that was released to the market 1 month ago.
• C) Knowing the contents of an annual report before it is released to the market would not be useful to an investor.
• D) Capital markets respond only to expected new information.

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Definitions:

Jean Piaget

A Swiss developmental psychologist best known for his theory of cognitive development that describes how children develop intellectual abilities from infancy to adolescence.

Sensorimotor Stage

The first of the four stages of cognitive development in Piaget's theory, occurring from birth to about 2 years of age, where infants learn about the world through their movements and sensory experiences.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed.

Abusive Parenting

A harmful pattern of behavior by parents towards their children, which can be physical, emotional, or sexual in nature.