In an Efficient Market, Ignoring Taxes and Time Value

question 41

Multiple Choice

In an efficient market, ignoring taxes and time value:

• A) the price of stock should decrease by the amount of the dividend immediately on declaration date.
• B) the price of stock should decrease by the amount of the dividend immediately on ex-dividend date.
• C) the price of stock should increase by the amount of the dividend immediately on declaration date.
• D) the price of stock should increase by the amount of the dividend immediately on ex-dividend date.

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Definitions:

Center of the Eye

Refers to the pupil, the circular, black-looking opening in the iris that regulates the amount of light that enters the eye.

Optic Nerve

A cranial nerve that transmits visual information from the retina to the brain.

Ganglion Cells

Type of neurons located in the retina of the eye that receive visual information from photoreceptors and transmit it to the brain via the optic nerve.

Blind Spot

The point in the visual field that lacks light-detecting photoreceptor cells, where the optic nerve passes through the optic disk of the retina.