Bus 401 week 1 Quiz

Bus 401 week 1 Quiz To test the theory of market efficiency, economists: Student Answer: look for a trading rule that produces returns higher than the market average. look for trading rules that can repeatedly produce returns higher than the market average. use statistical correlations over returns over time. must have good luck because such results are difficult to find. Instructor Explanation: The answer can be found in Section 1.2: Markets. The income statement shows which of the following? Student Answer: A company’s revenues and profits over some time period. A company’s financial position at a point in time. The value of inventory. Accounting results on a cash basis. Instructor Explanation: The answer can be found in Section 2.2: A Review of Financial Statements. Market price works best as an estimate of value when: Student Answer: a dominant seller sets prices. prices are listed in daily newspaper, and so are readily available. lots of buyers and sellers act quickly on new information. at least two people are competing. Instructor Explanation: The answer can be found in Section 1.2: Market