Which Is Most Accurate Concerning the Behavior of a Stock's

question 25

Multiple Choice

Which is most accurate concerning the behavior of a stock's return after a stock split relative to companies whose stock has not split?

• A)Compared to companies whose stock has not recently split,the stock prices of companies whose stock has recently split are less sensitive to improvements in performance.
• B)Compared to companies whose stock has not recently split,the stock prices of companies whose stock has recently split are significantly more sensitive to improvements in performance.
• C)Compared to companies whose stock has not recently split,the stock prices of companies whose stock has recently split are about equally sensitive to improvements in performance.
• D)Compared to companies whose stock has not recently split,the stock prices of companies whose stock has recently split are more sensitive to improvements in performance,but the difference is not significant.

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Definitions:

Firms Lay Off

A situation in which companies reduce their workforce due to financial constraints, lack of work, or restructuring processes.

Poverty Rate

The proportion of a population living below the national poverty line, indicating the percentage of people experiencing economic hardship.

Official Poverty Line

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country, used to identify individuals and households in need of assistance.

Minimum Food Bundle

The minimum set of food items required to meet the nutritional needs of an individual or family, often used in assessments of poverty and food security.