The Research Finding That Does Not Undermine the Assumption of Capital

question 18

Multiple Choice

The research finding that does not undermine the assumption of capital markets efficiency is:

• A)Abnormal returns can be earned by trading on accounting information that is private
• B)Financial analysts are fooled by profit figures and are optimistic in their forecasts
• C)The presence of post-announcement drift
• D)Failure of the market to recognise profit manipulation

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Definitions:

Traits

Enduring and distinct characteristics of an individual's personality that are consistent across different situations and time.

Abilities

A term for the various skills, talents, or competencies that an individual possesses, which may vary widely from person to person.

Reactance

A psychological response where individuals feel compelled to assert their freedom in reaction to perceived restrictions or coercion.

Attractiveness

The quality or combination of qualities that gives pleasure to the senses or pleasurably exalts the mind or spirit, often related to physical appearance but also including traits like charisma and intelligence.