If Capital Markets Are Efficient, Then the Sale or Purchase

question 40

Multiple Choice

If capital markets are efficient, then the sale or purchase of any security at the prevailing market price is generally

• A)a positive-NPV transaction.
• B)a zero-NPV transaction.
• C)a negative-NPV transaction.
• D)No general trend exists for such transactions.

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Definitions:

Production

The process of creating goods and services from various resources.

TPS

A Transaction Processing System is an information system that gathers, saves, alters, and provides access to an organization's transaction data.

Make-to-order

A production strategy where manufacturing starts only after a customer's order is received, allowing for customization of products but potentially leading to longer lead times.

Make-to-stock

A production strategy where items are manufactured for stock based on demand forecasts, rather than being custom made to order.