Share Prices That Are Stable Over Time ________

question 28

Multiple Choice

Share prices that are stable over time ________.

• A)indicate that prices are useful indicators of true economic value
• B)indicate that the market is not incorporating new information into current share prices
• C)ensure that an economy allocates its resources efficiently
• D)indicates that returns follow a random walk process

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Definitions:

Profit Margin

A financial metric that measures the percentage of revenue remaining after all expenses have been deducted from sales.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets financed by its shareholders' equity.

Absolute Advantage

A condition in which a country, company, or individual can produce a good or service at a lower cost per unit than competitors using the same amount of resources.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.