Which of the Following Statements Is Correct

question 9

Multiple Choice

Which of the following statements is correct?

• A)If the market is strong-form efficient it must also be weak-form efficient and semi-strong efficient.
• B)There is evidence to suggest that the market is strong-form efficient because corporate insiders have made extraordinary profits by trading on inside information.
• C)The Efficient Market Hypothesis states that security prices will be based on their expected return.
• D)None of these statements are correct.

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Definitions:

Bank Reconciliation

The analysis that details the items responsible for the difference between the cash balance reported in the bank statement and the balance of the cash account in the ledger.

Debit Memo

A document issued by a vendor to a customer, recording an increase in the amount a customer owes to the vendor due to various reasons like returned goods or underbilling.

Bank Service Charges

Fees charged by a bank to its customers for account maintenance, transactions, and other banking services.

Outstanding Checks

Checks that have been written and recorded in accounting books but have not yet been cashed or cleared by the bank.