If Financial Markets Were Not Efficient, It Would Be More

question 91

Multiple Choice

If financial markets were not efficient, it would be more likely for firms to:

• A) finance investments in a zero-NPV transaction.
• B) finance investments in a positive NPV transaction.
• C) totally avoid the need for external financing.
• D)finance investments in a negative NPV transaction.

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Definitions:

Utility Costs Factory

The expenses for utilities (electricity, gas, water, etc.) incurred in the operation of a manufacturing plant or facility.

Product Costs

Costs that are directly associated with the manufacturing of goods, including materials, labor, and overhead.

Customer Support

Services provided by a company to its customers to assist with product-related queries, problems, or returns.

General Administrative

Expenses related to the overall management and administration of a business, including executive salaries, office supplies, and legal fees.