Which of the Following Statements Is True About the Behavior

question 32

Multiple Choice

Which of the following statements is true about the behavior of stock prices concerning earnings announcements?

• A) prices tend to correctly anticipate dividend announcements
• B) analysts appear to forecast earnings better than mechanical models
• C) stock prices move in the opposite direction beforehand
• D) prices tend to react correctly but not fully

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Definitions:

Disadvantage

A condition or situation that makes it more difficult for someone or something to succeed or be effective.

Limited Liability

A legal structure that limits the amount of money that the owners or shareholders of a business can lose to the amount they invested in the company.

Classified by Ownership

Classified by ownership refers to distinguishing entities based on their ownership structure, such as public, private, or governmental.

Publicly Held

A designation for a company whose shares are traded publicly on stock exchanges and can be bought by investors.