Which of the Following Statements About Program Trading Is Incorrect

question 5

Multiple Choice

Which of the following statements about program trading is incorrect?

• A) It represents a computerized response by institutional investors to either buy or sell a large basket of stocks in response to movements in a particular stock index.
• B) It may involve the purchase of stocks that have become "underpriced."
• C) It may involve the sale of stocks that have become "overpriced."
• D) It is designed to capitalize on Federal Reserve monetary policy announcements.
• E) None of the above

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Definitions:

LIFO Method

Last In, First Out method, an inventory costing method where the last items purchased are the first ones sold.

Ending Inventory

The value of goods available for sale at the end of an accounting period, determined by a physical count or by applying the cost flow assumption.

Specific Invoice Method

A method of inventory cost calculation that identifies and uses the actual cost of each specific item sold.

High-Cost Goods

High-cost goods are items that require a considerable amount of money to purchase due to their quality, rarity, or other factors.