Stock prices are
A) based less on the current profitability of firms than on their expected future profitability.
B) based equally on the current profitability of firms and on their expected future profitability.
C) not based on the current profitability of firms or on their expected future profitability.
D) based more on the current profitability of firms than on their expected future profitability.
A
You might also like to view...
When sellers have more information about hidden characteristics of a good than buyers have, more low-quality units are likely to be sold than high-quality units. This is
a. the law of diminishing marginal returns b. the law of natural selection c. the winner's curse d. the lemons problem e. the problem of common pools
Defenders of advertising argue that firms use advertising as a signal of quality, even if the advertising delivers little helpful information about the product
a. True b. False Indicate whether the statement is true or false