The Efficient Markets Hypothesis Indicates That Investors

question 41

Multiple Choice

The efficient markets hypothesis indicates that investors

• A)can use the advice of technical analysts to outperform the market.
• B)do better on average if they adopt a "buy and hold" strategy.
• C)let too many unexploited profit opportunities go by if they adopt a "buy and hold" strategy.
• D)do better if they purchase loaded mutual funds.

---

Definitions:

Labor Efficiency Variance

The variance between the real hours spent working and the anticipated standard hours, times the standard rate of labor.

Actual Direct Labor Rate

The actual amount paid per hour to workers who are directly involved in the production of goods or services.

Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how well the company is managing its labor costs.

Direct Labor Standards

The expected amount of time and wage rate for workers to complete a unit of production.