Which of the following statements is true,regarding the Ball and Brown (1968)study?

Question

Quizplus · Accepted Answer

A) Ball and Brown (1968) study is widely recognized as one of the first accounting studies to employ statistical methods to test the association between accounting numbers and stock prices. Therefore, option A is incorrect as it does not state the actual contribution of the study correctly.

B) The Ball and Brown study examined earnings announcements and their impact on stock prices, but it did not explicitly investigate the usefulness of accounting earnings under the historical cost model. Therefore, option B is incorrect.

C) Ball and Brown (1968) found evidence of a positive association between earnings announcements and market prices, which implied that market participants use accounting information for investment decision-making. Therefore, option C is partially correct.

D) All of the given options are correct. Therefore, option D is the best choice as it includes all the correct statements about the Ball and Brown (1968) study.

Which of the Following Statements Is True,regarding the Ball and Brown