Please, respond to the attached two cases and include at least 2 references (citation). This...

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Please, respond to the attached two cases and include at least 2 references (citation). This assignment should be about 2 pages total (around 500 words including only the answers.)Thank you!

Instructions: Please, respond to the below two cases and include at least 2 references (citation). This assignment should be about 2 pages total (around 500 words including only the answers.) CASE 4-2 Supply and Demand The efficient market hypothesis is an extension of the supply and demand model. Required: a. Discuss the assumptions of the supply and demand model inherent in the Efficient Market Hypothesis. b. Why is the securities market viewed as a good example of the supply and demand model? c. Discuss the three forms of the Efficient Market Hypothesis. CASE 10-3 Equity Method and Disclosures On July 1, 2017, Dynamic Company purchased for cash 40 percent of the outstanding capital stock of Cart Company. Both Dynamic and Cart have a December 31 year‐end. Cart, whose common stock is actively traded in the over‐the‐counter market, reported its total net income for the year to Dynamic and also paid cash dividends on November 15, 2017, to Dynamic and its other stockholders. Required: a. How should Dynamic report the foregoing facts in its December 31, 2017, balance sheet and its income statement for the year then ended? Discuss the rationale for your answer. b. If Dynamic should elect to report its investment at fair value, how would its balance sheet and income statement differ from your answer to part (a)?

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Khushboo · Accepted Answer

Case 4-2
a) Efficient market hypothesis represents that all the known relevant information is reflected by the financial markets (James Wilkinson 2013). There exists various assumptions related to the supply and demand model which is inherited in the efficient market hypothesis such as it is assumed that all the information are reflected in the market hypothesis and all the economic units are having all understanding of the economy and it is also assumed that the stock is always correctly priced i.e. stocks are never undervalued or overvalued. It also assumes that there exist no artificial restrictions on supply and demand.
b) The securities market is concerned as the best illustration of the supply and demand model and it is due to the reason that the parties to the transactions are having all knowledge and no person can take advantage at the expense of the other person as I  this all person are having each and every information and thus the best example of this market is securities market and it can be stated that the information regarding the securities are available through various means such as financial statement of the company which were published,

Instructions: Please, respond to the below two cases and include at least 2 references (citation). This assignment should be about 2 pages total (around 500 words including only the answers.) CASE 4-2...

Answer To: Instructions: Please, respond to the below two cases and include at least 2 references (citation)....

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