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IgorLugansk [536]
3 years ago
11

Suppose you find that prices of stocks before large dividend increases show on average consistently positive abnormal returns. i

s this a violation of the emh? yes no
Business
2 answers:
bearhunter [10]3 years ago
8 0

Answer: No

Explanation:

EMH an acronym for Efficient market Hypothesis is a theory that security prices reflects all available information making it impossible to beat the market by taking undue advantages.

The information provided in the scenario is not detailed enough to give an investor the opportunity to earn abnormal returns .It just show that good performance leads to higher dividends as better performing stocks pay higher dividends

RideAnS [48]3 years ago
5 0

Answer:

NO

Explanation:

The efficient market hypothesis (EMH) theory states that the market price of securities reflects all the public information regarding them, e.g. expected earnings, etc. One of the basic premises of EMH is that it is useless for investors to pick individual stocks to try to obtain higher than normal results. It places a lot of emphasis on the market as a whole, instead of individual stocks.

If the prices of stocks vary a lot just before dividends increase, it actually reflects and supports EMH. Since the market expects an increase in dividends, the price of stocks will rise, but generally stock prices will rise too much and must then be adjusted to reflect the real value. Also, in the short run prices will appear to be varying randomly, but that happens because the inflow of information is not constant and expectations will vary. But on the long run, the prices will adjust to the correct information.

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You purchase a bond with an invoice price of $1,410. The bond has a coupon rate of 6.8 percent, and there are 3 months to the ne
Arlecino [84]

Answer:

clean price = $1,393

Explanation:

The clean price of the bond does not include any accrued interests. The invoice price = clean price + accrued interests

  • invoice price = $1,410
  • accrued interests = $1,000 x 0.068 x 3/12 = $17

clean price = invoice price - accrued interests = $1,410 - $17 = $1,393

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3 years ago
A $5 million deposit outflow from a bank has the immediate effect of
yuradex [85]

Answer:

C. Reducing deposits and reserves by $5 million.

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3 years ago
Economics students often confuse (a) diminishing returns related to the variable factors of production and (b) diseconomies of s
Sholpan [36]

Answer:

Marginal Product:

The marginal product of an input that is being used in the production process of a good or services is the extra output generated by using the extra unit of that input. Alternatively, the marginal product is the output generated by the last unit of the input added only.

Explanation:

  1. Diminishing marginal returns means that as you adds more units of that input, the marginal product declines. That is, each additional of extra unit of the input results in decreased and less additional output. For example, the marginal product of labor usually decreases as the amount of labor increases because there is a fixed amount of capital used in the short run, so when labor increases, the capital per unit of labor decreases, which results in each and every extra working being less productive than the previous one.
  2. Dis-economies of scale, whereas, results in an increase in the average cost of production as the number of units increases. That's why diminishing marginal returns refers to production, and dis-economies of scale refers to the average cost. Dis-economies of scale often happened because the production levels get high, there is less management on each employee, resulting in each employee having less motivation to work as hard due to lack of production making it hard to notice that change.So, it may results in the average worker's productivity decreasing, causing the per-unit cost to rise.
7 0
3 years ago
Prine Company purchased equipment on January ​1, 2018​, for $ 25 comma 000. Suppose Prine Company sold the equipment for $ 3 com
Marat540 [252]

Answer:

a. The company recognizes loss on the sale of the equipment $6,000

b. The entry to record the sale of the equipment:

Debit Cash $3,000

Debit Accumulated depreciation account $16,000

Debit Loss on sale equipment  $6,000

Credit Equipment $25,000

Explanation:

To recognize gain or loss on the sale of the equipment:

First, the company calculates the carrying amount of the asset by using the original cost of the asset, minus all accumulated depreciation and any accumulated impairment charges.

Then, subtract this carrying amount from the sale price of the asset. If the remainder is positive, it is a gain and if the remainder is negative, it is a loss

On December ​31, 2019​, the carrying amount of the asset = $25,000 - $16,000 = $9,000

Sale price - Carrying amount of the asset = $3,000 - $9,000 = -$6,000

=> The company recognizes loss on the sale of the equipment $6,000

b. The entry to record the sale should be made:  

Debit Cash $3,000

Debit Accumulated depreciation account $16,000

Debit Loss on sale equipment  $6,000

Credit Equipment $25,000

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A(n) ____ activity is one that happens on a regular basis.
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A recurring activity is one that happens on a regular basis. These activities usually are very similar and refer to the same thing and objective. Recurring activities that an organization carries out in order to enhance its efficiency and its ability to meet requirements can lead to c<span>ontinual improvement.
</span>

6 0
3 years ago
Read 2 more answers
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