Which of the Following Statements Is Incorrect

question 51

Multiple Choice

Which of the following statements is incorrect?

• A)Circuit breakers are trading restrictions imposed on specific stocks or stock indexes.
• B)Circuit breakers guarantee that prices will turn upward.
• C)Circuit breakers may be able to prevent large declines in prices that would be attributed to panic selling rather than to fundamental forces.
• D)Circuit breakers may allow investors to determine whether circulating rumors are true.

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Definitions:

Accounting Profit

Profits as shown on a company’s financial statements. Accounting profit does not necessarily correspond to real or economic profit.

Variable Costs

Costs that vary directly with the level of production or a company's output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Marginal Costs

The increase in total cost that arises from producing one additional unit of a good or service.