Which statement best explains the relationship between the efficient securities market hypothesis and accounting?
A)Security prices adjust slowly when accounting reports are publicly released.
B)The timeliness of accounting information is irrelevant to securities markets.
C)Accounting information competes with other sources of information.
D)Security prices are unaffected when accounting reports are publicly released.

Question

Quizplus · Accepted Answer

The efficient securities market hypothesis states that securities prices quickly and accurately reflect all publicly available information, including accounting information. Accounting information competes with other sources of information, such as news articles and analyst reports, to influence security prices. Therefore, the timeliness and accuracy of accounting information can have an impact on stock prices.

Which Statement Best Explains the Relationship Between the Efficient Securities