If Markets Are Efficient,when New Information About a Stock Becomes

question 25

Multiple Choice

If markets are efficient,when new information about a stock becomes available,the price will:

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

---

Definitions:

Plantwide Predetermined Overhead Rate

A single overhead rate calculated by dividing total estimated overhead costs by an estimated allocation base for the entire plant.

Direct Labor-hours

The sum of hours spent by staff actively involved in the process of manufacturing.

Activity Measure

A metric or index used to gauge the extent or level of activity undertaken in a particular process or operation.

Activity-based Costing

A method of allocating overhead and indirect costs to products or services based on the activities that generate those costs.