Use the Following to Answer Questions

question 206

Multiple Choice

Use the following to answer questions:
Figure: Efficient Market Outcome
-(Figure: Efficient Market Outcome) Refer to the figure. Which point represents the efficient equilibrium?

• A) A
• B) B
• C) C
• D) None of the answers is correct.

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Definitions:

Corporation

A business organized under state or federal statutes as a separate legal entity.

Stock Split

A corporate action to increase the number of shares by dividing each share, which decreases its price and makes it more accessible to investors without changing the market capitalization.

Market Value

The ongoing cost at which a commodity or service is available for buying or selling in the market.

Shares Outstanding

The total number of a company's shares that are currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.