According to the Semistrong Form of Market Efficiency,when New Information

question 116

Multiple Choice

According to the semistrong form of market efficiency,when new information becomes available in the market:

• A) stock prices will remain unchanged because they already reflect this information.
• B) stock prices will accurately and rapidly adjust to reflect this new information.
• C) stock prices will adjust to accurately reflect this new information over the course of the next few days.
• D) stock prices will most likely increase because all new information has a positive effect on stock prices.

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Definitions:

Estimated Net Realizable Value

The estimated selling price of goods minus the costs of their completion and the costs required to make the sale.

Bad Debt Expense

Reflects the cost of accounts receivable that a company no longer believes it will collect, indicating the expected uncollectable amounts.

Sales Discount

Cash discount offered to encourage prompt payment of an account receivable.

Account Receivable

Debts owed by clients to a firm for delivered goods or services awaiting payment.