Which of the following statements is true regarding the results obtained by capital market research? A. The relationship between earnings announcements and share price movements is positively related to the size of the entity. B. Earnings announcements have a more significant impact on the share prices of larger firms than on smaller firms. C. Compared to US markets, the Australian market has more extensive adjustments during the year with slower adjustments at earnings announcement. D. The relationship between earnings announcements and share price movements is negatively related to the size of the entity. Question 1.2: Which of the following is right about the semi-strong form of efficiency? A. All publicly available information is quickly/spontaneously and entirely impounded into share prices in an unbiased manner when released. B. All publicly available information is rapidly and fully impounded into share prices in a biased manner when released. C. All publicly available information is rapidly and partially impounded into share prices in an unbiased manner when released. D. Selected publicly available information is rapidly and fully impounded into share prices in an unbiased manner when released. Question 1.3: What is the purpose of developing a conceptual framework? A. To provide a coherent structure to accounting practice which had developed in an ad hoc way. B. To guide standard-setters to develop standards based on the same concepts and principles, rather than in a piecemeal approach. C. To guide users where there is no accounting standard covering an issue. D. All the given options are correct. Page 1 of 7 Question 1.4: The Brundtland Report defined sustainable development as "development that...": Explain the meaning of sustainability and why an entity might embrace sustainable development practices. A. Allows all people to meet their needs to an equal degree. B. Meets the needs of the present without compromising the ability of future generations to meet their own needs. C. Meets the needs of the future without compromising the ability of current genelations to meet their own needs. D. Meets the needs of the present while compromising the ability of future generations to meet their own needs. Question 1.5: Which of the following bonus schemes would be appropriate for the managers of a biotechnology research company? A. A combination of fixed basis and accounting-based scheme, as assuming that self- interest drives the actions of the managers, it may be necessary to put in place remuneration schemes that reward the managers in a way that is, at least in part, tied to the performance of the firm. B. A fixed basis scheme, so that the managers would not take significant risks, reject risky projects, and be reluctant to take on optimal levels of debt as it may be beneficial to those with equity in the firm. C. An accounting-based bonus scheme as this will be in the interest of the manager, as that manager will potentially receive more generous rewards and will not have to bear the costs of the perceived opportunistic behaviours. D. A market-based bonus scheme, as it is more appropriate to reward the manager in terms of the market value of the firm's securities, which are assumed to be influenced by expectations about the net present value of expected future cash flows, and the manager will be given an incentive to increase the value of the firm