Someone Who Is Using Information Outside the Efficient Markets Hypothesis

question 1

Multiple Choice

Someone who is using information outside the efficient markets hypothesis:

• A) has information about the aging U.S. population and expects stock for companies that cater to senior citizens to increase in value.
• B) reads in the newspaper about a merger between two profitable firms and expects the stock prices for these companies to rise.
• C) while auditing a dishonest company realizes that its profit estimates are greatly inflated and immediately sells her stock in the company.
• D) hears a rumor that a top bank may be in trouble and decides to sell his stock in that company.

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Definitions:

Spending Variance

The difference between the actual cost incurred for something and the expected cost according to a budget.

Tenant-Days

A metric used in real estate to quantify the number of days a property is rented out.

Revenue Variance

The difference between the actual revenue earned and the budgeted or forecasted revenue.

Client-Visits

The number of times clients go to a business or service provider's location within a specified period.