Question 19 (34 points) Match theories and concepts with the corresponding descriptions Their decisions come at random. They are not based on rational considerations. Occur randomly If released it would directly affect future cash flows of the firm. P Extent of a security's abnormal market return in response of the unexpected reported earnings Security market prices do respond to accounting information. 1. Rational individual When a person behaves in a manner contrary to that person's self- perception 2. Unexpected events 3. The wisdom of crowds At all times the prices reflect all information that is publically known. 4. Efficient securities market 5. Noise traders 6. Accounting information having value relevance Measured by the difference between the firm's net income or share price performance and the average performance of a peer group of similar firms 7. Earning Response Coefficient 8. Public good 9. Fair value The extent to which fair value accounting increases the magnitude of booms and busts thereby encouraging banks to unduly increase ending in booms and decreasing lending during bad times. 10. Procyclicalicity 11. Secured borrowing 12. Executive Compensation Plan 13. Relative Performance Evaluation Its comsumption by one person does not destroy it for use by another. 14. Taking a bath Decision is made based on the highest expected utility 15. Error Camouflage