Which of the following statements are inconsistent with the efficient market hypothesis?a. The average annual return on stocks is greater than zero. b. Stocks that outperform the index in March always underperform it in April. c. Half of fund managers are able to beat their relevant index each year, before fees. d. Stocks that outperform the index in March always outperform it in April.

Answers

Answer 1
Answer:

Answer:

b. Stocks that outperform the index in March always underperform it in April.

d. Stocks that outperform the index in March always outperform it in April.

Explanation:

The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.

Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.


Related Questions

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($420.00q) $ 147,000 Expenses: Wages and salaries ($11,500 $130.00q) 57,000 Supplies ($4.00q) 1,400 Equipment rental ($2,200 $25.00q) 10,950 Insurance ($3,900) 3,900 Miscellaneous ($510 $1.44q) 1,014 Total expense 74,264 Net operating income $ 72,736 Required: During May, the company’s actual activity was 340 diving-hours. Compute the flexible budget of activity.
Best Western University wants to increase the size of its student body by shifting the demand curve for its educational services to the right. Which of the following will most likely NOT shift its demand curve to the right?a. really popular, winning sports teamsb. an improved record in student job placementsc. lower tuition and lower prices on textbooksd. a "best buy" rating in a national magazine
"Jefferson Sports Medicine, Inc., offers two types of physical exams for students : the basic physical and the extended physical. The charge for the basic physical is $60, while the charge for the extended physical is $135 . Jefferson expects to perform 220 basic physicals and 190 extended physicals in July, 235 basic and 200 extended in August, and 105 basic and 110 extended in September . Prepa re the sales budget for the service revenue expected from the physical exams performed for the second quarter (July through September}, with a column for each month and for the quarter in total."
A good economic theory___________.a. choicesapproaches reality in all its complexity.b. involves some simplification of reality.c. focuses on the unique aspects of each situation.d. bears no relation to reality.e. is based on normative statements.
The concept of materiality: a. Affects only items reported in the income statement. b. Results in financial statements that are less useful to decision makers because many details have been omitted. c. Justifies ignoring the matching principle or the realization principle in certain circumstances. d. Treats as material only those items that are greater than 2% or 3% of net income.

Tina is an expert gardener. she provides services like setting up new gardens, maintaining gardens, and landscaping. in the context of service processes, the services provided by tina come under the category of

Answers

Based on the given description, Tina’s services fall into the category of possession processing services.

Possession processing service is defined as providing a service to goods or other physical possessions that the customer owns.

Thus, because Tina provides a service to people’s garden, her service falls into this category. Other examples for possession processing service include shoe cleaning service, plumbing, and housekeeping.

EA8. LO 2.2Suppose that a company has fixed costs of $18 per unit and variable costs $9 per unit when 15,000 units are produced. What are the fixed costs per unit when 12,000 units are produced?

Answers

Answer:

$22.5 per unit

Explanation:

Given that,

When 15,000 units produced,

Company has fixed costs per unit = $18 per unit

Company has variable cost per unit = $9 per unit

Therefore,

Total fixed cost at 15,000 units:

= 15,000 units × $18 per unit

= $270,000

Per unit Fixed cost at 12,000 units:

= Total fixed cost ÷ 12,000 units

= $270,000 ÷ 12,000 units

= $22.5 per unit

Final answer:

To find the fixed costs per unit when 12,000 units are produced, divide the total fixed costs by the number of units produced at that level.

Explanation:

To find the fixed costs per unit when 12,000 units are produced, we first need to calculate the total fixed costs at 15,000 units and then divide it by 15,000 to find the fixed cost per unit at that level of production. Given that the fixed costs are $18 per unit at 15,000 units, the total fixed costs at that level would be 15,000 units multiplied by $18, which equals $270,000. To find the fixed costs per unit at 12,000 units, we divide the total fixed costs of $270,000 by 12,000 units, resulting in a fixed cost per unit of $22.50.

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Which of the following costs are most likely to be classified as variable? A. Factory rent.
B. Manager salaries.
C. Insurance.
D. Direct materials.
E. Straight-line depreciation.

Answers

Answer:

Correct answer is D. Direct materials

Explanation:

Among the given choices, direct materials is most likely to be classified as variable cost. Direct materials are the supplies used in manufacturing products which can be directly identified in the output production. It is a main component which is traceable to create or produce products. Basically, all manufacturing industries used direct materials as their variable cost in their production.

An important function of the U.S. Federal Reserve is to a. set the debt ceiling. b. control the supply of money. c. mint coins. d. fund Congressional spending.

Answers

Answer:

b. control the supply of money.

Explanation:

The Federal Reserve System ( popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by Congress in 1913, and began operations in 1914. It is just like all central banks, the Federal Reserve is a United States government agency. The following are the responsibilities of the Fed Reserves System;

- It has the power to supervise and regulate banks.

- They promote public goals such as economic growth, low inflation, and the smooth operation of financial markets (monetary policies).

- The Federal Reserve is the "lender of last resort."

Hence, an important function of the U.S. Federal Reserve is to control the supply of money. The monetary liabilities of the Federal Reserve include currency in circulation and reserves. The currency in circulation includes all of the US paper currency (dollar bill) that are available in the country while reserves refers to the minimum deposits being held for the U.S Treasury and depository financial institutions by the Fed.

The Perez Company had a 12.5% return on a $100,000 investment in new equipment. The investment resulted in increased sales, and the resultant increase in income amounted to 5% of sales. The turnover (asset utilization) was:

Answers

Answer: 2.5

Explanation:

The Turnover (Asset Utilization) is calculated by dividing the business Turnover (Sales) by it's Assets.

We have the amount of assets (Investment). Now we have to calculate the Sales.

The Net Income was 12.5% of $100,000 so solving for that would be,

= 0.125 * 100,000

= $12,500

$12,500 was the Net Income.

It was said that the Net Income was 5% of sales so using algebra we have,

12,500= 0.05x

x = 12,500/0.05

= $250,000

With sales of $250,000 we can calculate the Turnover as,

Asset Turnover = Sales / Assets( Investment)

= 250,000/100,000

= 2.5

If you need any clarification do react or comment.

Answer:

The Turnover = 2.5

Explanation:

Step 1 : Find Net income

Return on Investment (ROA) = Net income/ Assets

12.5%=Net Income/$100,000

Net income = $100,000*12.5%

Net income= $12,500

Step 2 : Calculate Sales

Net income = Sales *5%

Therefore substitute known values

Sales = $12,500 *100/5

Sales = 250,000

Step 3 : Calculate Turnover ratio

Turnover = sales/ Assets

               = 250,000/100,000

              =2.5

A number of activities that are a part of a company's quality control system are listed below: a. Product testing.
b. Product recalls.
c. Rework labor and overhead.
d. Quality circles.
e. Downtime caused by defects.
f. Cost of field servicing.
g. Inspection of goods.
h. Quality engineering.
i. Warranty repairs.
j. Statistical process control.
k. Net cost of scrap.
I. Depreciation of test equipment.
m. Returns and allowances arising from poor quality.
n. Disposal of defective products.
o. Technical support to suppliers.
p. Systems development.
q. Warranty replacements.
r. Field testing at customer site.
s. Product design.

Required:
1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost.
2. Which of the four types of costs in (1) above are incurred in an effort to keep poor quality of conformance from occurring? Which of the four types or costs in (1) above are incurred because poor quality of conformance has occurred?

Answers

Answer:

Explanation:

A. Product testing - Appraisal cost

B. Product recalls - External Failure cost

C. Rework labor and overhead - Internal Failure cost

D. Quality circles - Prevention cost

E. Downtime caused by defects - Internal Failure cost

F. Cost of field servicing - External Failure cost

G. Inspection of goods - Appraisal cost

H. Quality engineering -  Prevention cost

I. Warranty repairs - External Failure cost

J. Statistical process control -Prevention cost  

K. Net cost of scrap - Internal Failure cost

L. Depreciation of test equipment - Appraisal cost

M. Returns and allowances arising from poor quality - External Failure cost

N. Disposal of defective products - Internal Failure cost

O. Technical support to suppliers - Prevention cost

P. Systems development - Prevention cost

Q. Warranty replacements -   Internal Failure cost

R. Field testing at customer site - Appraisal cost

S. Product design -  Prevention cost

2. Which of the four types of costs in (1) above are incurred in an effort to keep poor quality of conformance from occurring? Prevention costs and appraisal costs.

Which of the four types or costs in (1) above are incurred because poor quality of conformance has occurred?   Internal failure costs and external failure costs

Final answer:

The costs associated with each activity can be classified into prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention costs are incurred to keep poor quality of conformance from occurring, while internal failure costs occur because poor quality of conformance has occurred within the organization.

Explanation:

The costs associated with each activity can be classified as follows:

  1. Prevention cost: Product design, Quality circles, Quality engineering, Statistical process control, Systems development
  2. Appraisal cost: Inspection of goods, Depreciation of test equipment
  3. Internal failure cost: Rework labor and overhead, Downtime caused by defects, Cost of field servicing, Net cost of scrap, Depreciation of test equipment, Returns and allowances arising from poor quality, Disposal of defective products, Technical support to suppliers, Systems development
  4. External failure cost: Product recalls, Warranty repairs, Warranty replacements, Field testing at customer site

Prevention costs are incurred to keep poor quality of conformance from occurring, while appraisal costs are incurred to assess the conformance of products. Internal failure costs occur because poor quality of conformance has occurred within the organization, while external failure costs occur because poor quality of conformance has occurred outside of the organization.

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