Use the following statements to answer the question:
I.Increasing disclosure of information about the firm enhances transparency in the market.
II.Disclosure enhances the understanding of a firm's actions, hence it increases the efficiency of the market.
A)I is incorrect, II is correct.
B)I is correct, II is incorrect.
C)I and II are incorrect.
D)I and II are correct.

Question

Quizplus · Accepted Answer

Both statements I and II are correct. Increasing disclosure of information about the firm allows investors to make more informed decisions, which increases transparency in the market. This increased transparency also enhances the understanding of a firm's actions, thus increasing market efficiency.

Use the Following Statements to Answer the Question