Author Question: The CEO of High Tech International decides to change an accounting method at the end of the current ... (Read 34 times)

mikaylakyoung

  • Hero Member
  • *****
  • Posts: 531
The CEO of High Tech International decides to change an accounting method at the end of the
  current year. The change results in reported profits increasing by 5, but the company's cash flows
  are not changed.
 
  If capital markets are efficient, then
  A) the stock price will increase only if the accounting change will also result in higher profits in
  the next year.
  B) the stock price will not be affected by the accounting change.
  C) the stock price will decrease because accounting method changes are not permitted under
  generally accepted accounting principles.
  D) the stock price will increase due to higher profits.

Question 2

Insurance companies invest in the long-end of the securities market by purchasing securities with
  longer maturities. In which of the following instruments would an insurance company be least
  likely to invest most of its assets?
 
  A) corporate stocks B) mortgages
  C) corporate bonds D) commercial paper


EAN94

  • Sr. Member
  • ****
  • Posts: 307
Answer to Question 1

B

Answer to Question 2

D



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

For a complete list of videos, visit our video library