Question 1 (8 Points) The present value model under ideal conditions provides the most relevant information to stakeholders. Relevant information is information about the firm's future economic prospects. Also important is examining the conditions under which financial information is reliable. Required a) Define the concept of an efficient market and briefly explain three dimensions of reliability. 4 b) Under ideal conditions of certainty, explain in your own words what role a firm's net income plays in the firm's valuation once a statement of financial position amounts is known. c) Briefly explain in your own words the role of financial reporting in an efficient market with information asymmetry. 2 2