Which of the Following Statements Is False

question 8

Multiple Choice

Which of the following statements is false?

• A) If the profit opportunities from having private information are large, other individuals will attempt to gain the expertise and devote the resources needed to acquire it.
• B) When private information is relegated to the hands of a relatively small number of investors, these investors may be able to profit by trading on their information.
• C) When a buyer seeks to buy a stock, the willingness of other parties to sell the same stock suggests that they value the stock differently.
• D) Since stock markets aggregate the information and views of many different investors, we expect the stock price to react slowly to new publicly available information as the investors continue to trade until a consensus is reached as to the new value of the stock.

---

Definitions:

Useful Life

The expected period over which an asset is anticipated to be used by an organization, or the number of production or similar units expected to be obtained from the asset.

Production Capacity

The maximum output a business can produce in a given period under normal conditions.

Accumulated Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was put into use.

Useful Life

The estimated period over which an asset is expected to be usable by the company, impacting depreciation calculations.