Question
If securities markets are efficient, which of the following statements about the role of accruals is correct? Group of answer choices a. The higher the
If securities markets are efficient, which of the following statements about the role of accruals is correct?
Group of answer choices
a. The higher the accruals component in earnings as a proportion of cash flows, the stronger the market reaction to earnings announcements.
b. The lower the accruals component in earnings as a proportion of cash flows, the stronger the market reaction to earnings announcements.
c. There is no relation between the magnitude of the accruals component in earnings as a proportion of cash flows, and the market reaction to earnings announcements.
d. The higher the accruals component in earnings as a proportion of cash flows, the stronger the market reaction to earnings announcements for positive accruals.
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