Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)Stock markets aggregate the information and view of many different investors.
• B)Only in the relatively rare case in which we have some superior information that other investors lack regarding the firm's cash flows and cost of capital would it make sense to second-guess the market stock price.
• C)In most situations,a valuation model is best applied to tell us something about the value of the firm's stock.
• D)The efficient market hypothesis implies that securities will be fairly priced,based on their future cash flows,given all information that is available to investors.

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Definitions:

Price Standard

A pre-determined cost per unit of input or output, used for setting budgets and measuring performance.

Variable Overhead Efficiency Variance

Variable overhead efficiency variance is a metric used to measure the difference between the expected (standard) and actual use of variable overhead resources in production.

Standard Machine-Hours

A predetermined measure of how much machine time is expected for a task, used in cost accounting.

Variable Overhead Rate Variance

The difference between the actual variable overhead rate incurred and the standard rate, multiplied by the actual activity level.