In Order for Costs or Benefits to Be Relevant, What

question 4

Multiple Choice

In order for costs or benefits to be relevant, what must be true?

• A) All decisions must relate to future.
• B) Identifying relevant costs and benefits is an easy process.
• C) Relevancy will relate both to the future and the past.
• D) All of these are true statements.

---

Definitions:

Market Efficiency

The degree to which market prices fully reflect all available information and expectations, enabling securities to be priced appropriately.

Black Monday

Refers to a specific date, October 19, 1987, when stock markets around the world crashed, recording the largest one-day percentage decline in stock market history.

Daily Returns

The profit or loss of an investment over a single trading day, expressed as a percentage of the investment's value at the start of the trading day.

Normally Distributed

A statistical term that describes a bell-shaped frequency distribution that is symmetric about the mean, used in various financial models to assume the distribution of returns or asset prices.