For Corporate Financial Managers an Important Lesson of Market Efficiency

question 106

Multiple Choice

For corporate financial managers an important lesson of market efficiency is:

• A) Trust market prices unless you have a clear advantage that ensures the odds are in your favor.
• B) Issue stock after a rise in price.
• C) Be on the lookout for undervalued companies to take over.
• D) Your company should be able to make healthy profits from its foreign exchange dealings.

---

Definitions:

Economic Strategies

Plans or policies implemented by governments or businesses to influence and guide the economy towards desired goals such as growth, stability, or equity.

Tariffs

Taxes imposed on imported or, less commonly, exported goods to regulate trade and revenue.

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold, used historically to provide stability in currency value.

Box Office Draw

A measurement of the appeal or popularity of an entertainment event or figure, based on ticket sales revenue.