The Efficient Markets Hypothesis Suggests That Investors

question 2

Multiple Choice

The efficient markets hypothesis suggests that investors

• A)should purchase no-load mutual funds which have low management fees.
• B)can use the advice of technical analysts to outperform the market.
• C)let too many unexploited profit opportunities go by if they adopt a "buy and hold" strategy.
• D)act on all "hot tips" they hear.

---

Definitions:

Precise And Formally

Characterized by exactness and strict adherence to a defined or prescribed format.

Direct Experience

The knowledge or wisdom gained from personally encountering or undergoing something, as opposed to learning about it from secondary sources.

Risk Seeking

A tendency to engage in behaviors or make decisions that entail known risks in the hope of achieving greater rewards.

Probability Of Loss

The likelihood or chance that an investment will result in a loss rather than a profit.