The Efficient Markets Hypothesis Explains the Fact That the Stock

question 44

Multiple Choice

The efficient markets hypothesis explains the fact that the stock picks of some investment analysts earn returns greater than broad-based market indexes as resulting from

• A)the superior insight of these analysts.
• B)the ability of these analysts to exploit loopholes in the tax laws.
• C)the inside information these analysts possess.
• D)chance.

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Definitions:

Owners' Claims

The financial interest or claims that business owners have in the assets of their company, often calculated as equity.

Assets

Economic resources owned or controlled by a business or individual, expected to produce value or benefit in the future.

Investing Activities

Financial actions related to acquiring or disposing of long-term assets and other investments.

Long-term Borrowing

Debt obligations or loans that are due to be repaid over a period longer than one year, often used for large capital investments.