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Proponents of the efficient market hypothesis believe that market anomalies are best described by which of the following?

Which branch of economics does accounting fall under?

David has $2,500 that he would like to invest for 1 year.  He has narrowed his choices down to the following 2 choices: Choice 1 – buy corporate bonds paying 8% interest. Choice 2 – buy government bonds paying 3% interest. David assess the probability of the corporate bond defaulting as 45% in which case he will receive no interest but he will get his principal back.  David’s utility function is defined as the square root of the net payoff (which is equivalent to the net payoff raised to the power of 1/2).  Part A – 4 Marks Based on David’s prior probabilities, which action should David take?  Show your calculations.  In your answer you should show the calculations for the utility he would receive for each bond. (Please do your best to show calculations, for example the square root of 9 could be written as square root (9) = 3) Part B – 2 Marks If David is concerned with the bond defaulting, what additional things should he do? Identify and explain 3 different things he can research to limit the risk he is facing with concepts and ideas taught in this course. 

Which of the following does historical cost accounting allow for current values on a firm’s balance sheet?

Which organization is responsible for setting accounting standards internationally?

If someone finds that they can make profitable trades based on accounting information this would be evidence against which form of market efficiency?

Which of the following is NOT an investment classification for debt and equity instruments in the current value framework?

Competition in financial markets will result in which of the following?

Part A –  Explain why a firm’s manager might both believe in securities market efficiency and engage in earnings management. Part B – For an income management strategy of taking a bath, the probability of the manager receiving a bonus in future years rises.  Explain why. Part C – What are discretionary accruals and why are they important to the economic consequences of accounting theory.  Explain.

The middle ear space helps overcome what physical phenomenon? (Choose one)