The merchant courts were established because of the unfair results and limited remedies available in the chancery courts

An investor is faced with the decision of whether to invest in a stock with an expected return of 14% or a stock in the same industry with an expected 20% return. Which of the following seems most likely?

A) the 20% stock is a better investment. B) Both stocks are priced correctly given their perceived risk. C) the 14% stock is overpriced. D) Both stocks will have approximately the same return.

Bad firms

A) do not have an incentive to make themselves look good. B) will slant the information they are required to transmit to the public. C) both A and B of the above. D) neither A nor B of the above.