In an Efficient Market, Ignoring Taxes and Time Value, the Price

question 17

Multiple Choice

In an efficient market, ignoring taxes and time value, the price of stock should:

• A)decrease by the amount of the dividend immediately on the declaration date.
• B)decrease by the amount of the dividend immediately on the ex-dividend date.
• C)increase by the amount of the dividend immediately on the declaration date.
• D)increase by the amount of the dividend immediately on the ex-dividend date.
• E)Both B and C.

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Definitions:

Retroactive Interference

A memory phenomenon where new information disrupts the recall of older information.

Memory Retrieval

The process of recalling or recognizing information stored in memory, an essential component of the memory process.

Proactive Interference

The phenomenon where older memories interfere with the recall of newer memories.

Forward-Acting

Describes actions or decisions that are intended to have positive impacts or benefits in the future, often involving proactive thinking and planning.