The Efficient-Market Hypothesis

question 30

Multiple Choice

The efficient-market hypothesis

• A) implies that security prices properly reflect information available to investors.
• B) has little empirical validity.
• C) implies that active traders will find it difficult to outperform a buy-and-hold strategy.
• D) has little empirical validity and implies that active traders will find it difficult to outperform a buy-and-hold strategy.
• E) implies that security prices properly reflect information available to investors and that active traders will find it difficult to outperform a buy-and-hold strategy.

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Definitions:

Evaluate

To assess or appraise the value, performance, or significance of an object, project, or situation.

Exponent Laws

A set of rules guiding the operations (such as multiplication, division, and raising to powers) on expressions with exponents.

Perform Operation

The execution of a series of actions or tasks according to specified procedures or instructions.

Evaluate

The process of assessing or determining the significance, worth, or condition of something, often by careful appraisal and study.