According to studies cited in the text, increased disclosure about financial price risks and risk management activities results in each of the following EXCEPT
A) higher trading volumes
B) increased risks of litigation over accounting disclosure practices
C) increased share price sensitivity to underlying financial prices
D) lower trading volume sensitivity to changes in underlying financial prices
E) lower bid-ask spreads

Question

Quizplus · Accepted Answer

The studies cited in the text suggest that increased disclosure about financial price risks and risk management activities results in higher trading volumes, increased share price sensitivity to underlying financial prices, lower trading volume sensitivity to changes in underlying financial prices, and lower bid-ask spreads. However, there is no mention of increased risks of litigation over accounting disclosure practices as a result of increased disclosure.

According to Studies Cited in the Text, Increased Disclosure About