The Price Discovery Function of Markets Is Useful

question 33

Multiple Choice

The price discovery function of markets is useful:

• A)to investors, to help them monitor the value of their investments
• B)to potential issuers of securities because it informs them of the proceeds they can expect to receive
• C)in revealing the general movement in market values through indices.
• D)All of these.
• E)None of these.

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Definitions:

T-distribution

A probability distribution used in statistics that arises when estimating the mean of a normally distributed population in situations where the sample size is small and the population standard deviation is unknown.

Standard Normal Distribution

Normal distribution measured in standard deviation units with a mean equal to 0 and a standard deviation equal to 1.

Sampling Distribution

The distribution pattern of probabilities for a certain statistic obtained through random sampling.

Alpha (α)

Probability of a statistic used to make the decision whether to reject the null hypothesis.