If a securities market is efficient, it is most likely that:
A. Security prices would react only to the “unexpected” elements of information.
B. Investors would prefer active investment strategies to passive investment strategies.
C. The time frame for price adjustment allows many traders to earn profits with little risk.
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With respect to the four major measurement scales (ratio, ordinal, interval, and nominal) the scale that represents the weakest level of measurement is the:
A. Nominal scale
B. Ordinal scale
C. Interval scale
The crowding-out model suggests that the stimulus effect of increased government expenditures will be modified by changes in real interest rates and the flow of foreign financial capital, because real
A. Rise and inflows of financial capital from outside the country will increase.
B. Rise and inflows of financial capital from outside the country will decrease.
C. Fall and inflows of financial capital from outside the country will increase.
Disclosures related to the valuation allowance for changes in the carrying amount of a companys noncurrent investment securities will most likely be included in the companys:
A. Income statement
Balance sheet
C. Statement of stockholders equity
A private agreement between two parties to exchange a series of future cash flows, with at least one of the two series of cash flows determined by a later outcome, is best characterized as a (n):
A. swap
B. Futures contract
C. Over-the-counter contingent claim