If Markets Are Efficient, Which of the Following Investors Should

question 34

Multiple Choice

If markets are efficient, which of the following investors should achieve superior returns over time?

• A)Investors who choose stocks by throwing darts at a list of stocks in the financial pages of a newspaper
• B)Analysts who spend considerable time evaluating the best stocks to buy
• C)Mutual fund managers who manage other people's money for a living
• D)None of these options.

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Definitions:

Distant State

A term that may refer to a state that is geographically far from a certain reference point or in a figurative sense, indicating a state of being quite different from a current condition.

Dissatisfied Customer

A consumer who is unhappy with the goods or services received from a business.

Trade-offs

Situations where a gain in one area requires a loss in another, often involving decisions that balance out different factors or outcomes.

Law

A set of regulations developed and implemented by social or government bodies to control actions.