Which of These Is True with Respect to Information Transfer

question 3

Multiple Choice

Which of these is true with respect to information transfer research?

• A)The research is based on the premise that positive profits for one firm in an industry reflects improved conditions in that industry
• B)The variance of abnormal returns for competing firms decreases when another firm in the same industry makes a profit announcement
• C)There are significant price reactions by non-announcing firms to early announcers sales and profit changes
• D)B and C only

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