ACC304 Sem 2, 2019-Topic 10.1_Capital Market Research

Question 1

Methods that are used to examine whether share prices react to accounting information:

Accepted Answer

Event study, Association study

Question 2

Factors that are commonly considered by capital market researchers:

Accepted Answer

All of above

Question 3

Which is the primary perspectives in the capital market research?

Accepted Answer

Measurement perspective, Information perspective

Question 4

An investor who prefers lower returns with known risk is

Accepted Answer

risk averse

Question 5

The voluntary disclosure literature offers the best opportunity for understanding

Accepted Answer

the role of accounting information

Question 6

Information perspective studies tell us that:

Accepted Answer

good news should cause a share price to increase

Question 7

Which of the following is TRUE about the efficiency of capital market?

Accepted Answer

Capital markets are assumed to be efficient., market efficiency is important to accounting

Question 8

Voluntary disclosure theory predicts that:

Accepted Answer

management incentive to maximize firm value, shareholders optimize disclosure policy

Question 9

Why manager delay disclosing good news before their stock option award periods

Accepted Answer

to maximise their stock‐based compensation

Question 10

The larger the market value of the firm, the smaller its abnormal returns at announcement dates

Accepted Answer

True

Questions 10