Which of the Following About Stock Prices Is True

question 241

Multiple Choice

Which of the following about stock prices is true?

• A) The buyer of a firm's stock is purchasing a fractional share in the firm's future net revenues.
• B) When investors believe that a business decision by the management of a firm will increase the firm's future earnings, the price of the firm's stock will tend to rise.
• C) Changing stock prices provide the board of directors and managers of a firm with a strong incentive to make good decisions and undertake productive projects.
• D) All of the above are true.

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Definitions:

Foramen Magnum

The large opening in the base of the skull through which the spinal cord passes, connecting the brain to the spinal column.

Bipedal Primate

A member of the primate group that is capable of walking upright on two legs, a trait that distinguishes humans and their ancestors.

Anthropoids

A subgroup of primates, including humans, apes, and most monkeys, characterized by higher brain development and more complex behaviors.

Tarsiers

A genus of small, nocturnal primates with large eyes and long tails, found in Southeast Asia.