If in an Efficient Market All Prices Are Correct and Reflect

question 76

Multiple Choice

If in an efficient market all prices are correct and reflect market fundamentals,which of the following is a false statement?

• A) A stock that has done poorly in the past is more likely to do well in the future.
• B) One investment is as good as any other because the securities' prices are correct.
• C) A security's price reflects all available information about the intrinsic value of the security.
• D) Security prices can be used by managers to assess their cost of capital accurately.

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Definitions:

Authoritarian Parents

Parents who employ a strict parenting style characterized by high demands and low responsiveness, emphasizing obedience and discipline over nurturing.

Self-Characterization Sketch

A narrative or descriptive account that an individual provides about themselves, often highlighting personal traits, ambitions, and self-perception.

Repertory Grid

A technique used in personal construct psychology to assess and evaluate an individual's way of construing or understanding the world and people around them.

Corollaries

Propositions that follow from and are often appended to a theorem or proposition that has already been proven.