In an Efficient Capital Market

question 4

Multiple Choice

In an efficient capital market,

• A) security prices fully reflect the knowledge and expectations of all investors at a particular point in time.
• B) investors and financial managers have no reason to believe the securities are not priced at or near their true value.
• C) prices of securities adjust as new information becomes available to the market.
• D) All of the above are true.

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Definitions:

Moral Development

Refers to the process through which individuals develop proper attitudes and behaviors toward other people in society, based on social and cultural norms, personal beliefs, and experiences.

Direct Consequences

Immediate results or effects that follow an action or decision without any intervening factors or mechanisms.

Kohlberg

Relates to Lawrence Kohlberg, a psychologist known for his theory on the stages of moral development.

Leadership Ethics

Involves principles and values that guide leaders in making decisions that are fair, responsible, and respectful of others, ensuring their actions uphold moral standards.