The Price of Amazon

question 24

Multiple Choice

The price of Amazon.com stock was very high in the 1990s although the company never earned an economic profit.This demonstrates that:

• A)investors' expectations of future profits alone influence the stock prices.
• B)the performance of a firm has no bearing on stock prices.
• C)stock markets are highly inefficient because investors vary in their risk appetites.
• D)speculation based on wishful thinking by investors have a bearing on the stock prices.
• E)investor expectations are generally rational.

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Definitions:

Nitrogen Oxides

Gaseous compounds of nitrogen and oxygen, such as NO and NO2, that contribute to air pollution and can have harmful effects on human health and the environment.

Endemic Species

A species found only in the region where it evolved.

Habitat Destruction

The process by which a natural habitat becomes incapable of supporting its native species, leading to a loss of biodiversity.