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Gemiola [76]
3 years ago
5

Dan is a chemist for ABC, a major drug manufacturer. Dan cannot earn excess profits on ABC stock based on the knowledge he has r

elated to his experiments if the financial markets are:_________________.
1. strong form efficient.
2. semistrong form efficient.
3. weak form efficient.
4. aware that the trader is an insider.
5. efficient at any level.
Business
2 answers:
Viefleur [7K]3 years ago
6 0

Answer:

1) strong form efficient.

Explanation:

The efficient market hypothesis states that all the relevant information regarding stocks traded in a market is already included in the price of the stocks.

This investment theory argues that if all the relevant information was public, then even if a person had insider information, it would be useless since everyone should have access to the same information. Of course this model is only theoretical, since in real life information is something very valuable and not everyone has access to it.

Readme [11.4K]3 years ago
5 0

Answer:

2. Semi-Strong Form Efficient

Explanation:

Semi-strong form of market efficiency occurs when all publicly available information is reflected on security prices such that, earning additional return is not a possibility.

Here, Dan can not earn excess profits on ABC stocks because, if the financial market is semi strong form efficient, his experience on technical and fundamental analysis, which is based on how profit is generated and current information respectively, can not help to determine the price movement in the future.

Also, based on research, it is suggested that developed market are semi strong efficient, while developing markets are not semi strong efficient.

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Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. DU
Ghella [55]

Answer:

Companywide income would increase by $6,000 if West Division is eliminated.

Explanation:

The amount by which the companywide income will increase or decrease if West Division is eliminated can be determined by comparing Revenue with avoidable cost.

Avoidable cost refers to the cost that will be eliminated or not incurred if a firm decides to change the course of a business.

In this question, avoidable cost is simply the cost or expenses that will be eliminated if West Division is eliminated.

Among all the expenses in the question, only Companywide facility-sustaining costs which is $78,000 cannot be eliminated if West Division is eliminated.

Therefore, avoidable cost can be calculated as follows:

Avoidable cost = Salaries for drivers + Fuel expenses + Insurance + Division-level facility-sustaining costs = 210,000 + 30,000 + 42,000 + 24,000 = $306,000

Since, Revenue = $300,000

Decision rule:

1. If revenue is greater than avoidable cost, we have a decrease in income. Therefore, the division should not be eliminated.

2. If revenue is less than avoidable cost, we have an increase in income. Therefore, the division should be eliminated.

Since the revenue of $300,000 is less than the avoidable cost of $306,000, it implies we have an increase in income based on the decision rule 2. The increase in income is calculated as follows:

Increase in income if West Division is eliminated = Avoidable cost – Revenue = $306,000 - $300,000 = $6,000

Therefore, companywide income would increase by $6,000 if West Division is eliminated

Since there would be an increase in income of $6,000, West Division should therefore be eliminated.

4 0
3 years ago
An attractive business climate is defined by only one dimension: it minimizes the political risk to a company.
kari74 [83]
I believe the correct answer is false. <span>An attractive business climate is not defined by only one dimension: it minimizes the political risk to a company. Other than this, there are other indicators present. Hope this answers the question. Have a nice day.</span>
4 0
3 years ago
Sammie is planning a persuasive request. What advice should she follow for the opening of her request? a. Capture the reader's a
Andrei [34K]

Answer:

a. Capture the reader's attention and interest.

Explanation:

To be able to make a request to someone persuasively, , it is very pertinent to lead the person to a point where such person can listen to you. This can only work in a context where you are very efficient in using story telling and other means of interaction that are capable of winning the persona interest and loyalty. Otherwise, you cannot have the person respond to your request.

4 0
3 years ago
What is the largest source of revenue in california?
MArishka [77]
The three largest sources of revenue are personal income taxes, sales and use taxes, and corporate income taxes (in that order).
8 0
3 years ago
Crane Company's accounting records reflect the following inventories: Dec. 31, 2017 Dec. 31, 2016 Raw materials inventory $21000
TiliK225 [7]

Answer:

$910,000

Explanation:

Given the above information, total raw materials available for use during 2017 is calculated below;

= Beginning raw materials + Purchases

Beginning raw materials = $210,000

Purchases = $700,000

Then,

Total raw materials available for use during 2017 for Crane company

= $210,000 + $700,000

= $910,000

5 0
3 years ago
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