If the Efficient Markets Hypothesis Is Correct,then

question 12

Multiple Choice

If the efficient markets hypothesis is correct,then

• A)the number of shares of stock offered for sale exceeds the number of shares of stock that people want to buy.
• B)the stock market is informationally efficient.
• C)stock prices never follow a random walk.
• D)All of the above are correct.

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Definitions:

Factory Overhead Applied

The allocation of all indirect costs of manufacturing to the actual production, aiding in the determination of the total cost of production.

Predetermined Factory Overhead Rate

The rate used to apply factory overhead costs to the goods manufactured. The rate is determined by dividing the budgeted overhead cost by the estimated activity usage at the beginning of the fiscal period.

Activity Base

A measure used in costing, representing a unit of activity that triggers costs, helping to allocate costs more accurately.

Factory Overhead

Factory overhead refers to all indirect costs associated with manufacturing, excluding direct materials and direct labor expenses.