If the Efficient Market Hypothesis Holds, Investors Should Expect

question 33

Multiple Choice

If the efficient market hypothesis holds, investors should expect
I.to receive a fair price for their security
II.to earn a normal rate of return on their investments
III.to be able to pick stocks that will outperform the market

• A)I only
• B)II only
• C)III only
• D)I and II only

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Definitions:

Marx

Karl Marx, a 19th-century philosopher, political economist, and revolutionary known for his theories about capitalism and communism.

Differentiation

The process by which entities or systems become more complex, diverse, or distinct from each other or their previous state.

Theoretical Approach

An organized set of principles and ideas intended to explain specific phenomena or guide research and practice in a particular field.

Functionalism

A theoretical framework in sociology that focuses on how the various parts of society contribute to the overall stability and functionality of the system.