Author Question: The CEO of High Tech International decides to change an accounting method at the end of the current ... (Read 67 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 average office desk has 400 times more bacteria on it than a toilet.

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

Asthma cases in Americans are about 75% higher today than they were in 1980.

Did you know?

Atropine was named after the Greek goddess Atropos, the oldest and ugliest of the three sisters known as the Fates, who controlled the destiny of men.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

For a complete list of videos, visit our video library