If the Stock Market Is Efficient with Respect to the Incorporation

question 7

Multiple Choice

If the stock market is efficient with respect to the incorporation of publicly available information,then:

• A)charting a company's share prices is likely to be profitable.
• B)technical analysis is likely to be profitable.
• C)fundamental analysis is unlikely to be profitable.
• D)insider information is unlikely to lead to abnormal profits.

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Definitions:

Inventory Count

A physical count of products or materials a company has in stock, typically conducted periodically to ensure inventory records match actual stock levels.

Gross Profit Method

An accounting technique used to estimate the amount of ending inventory and cost of goods sold, based on the gross profit margin.

Ending Inventory

The total value of all unsold goods and materials that a company holds at the end of an accounting period.

Gross Profit on Sales

The difference between sales revenue and the cost of goods sold before deducting overheads, taxes, or interest.