An Efficient Market Is Defined as One Where All Investments

question 316

Multiple Choice

An efficient market is defined as one where all investments in that market are ____ investments.

• A) Zero net present value
• B) Positive net present value
• C) Zero real rate of return
• D) Zero risk premium
• E) Positive real rate of return

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Definitions:

Taxation

A process by which governments finance their expenditure by imposing charges on citizens and corporate entities.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately impacting those with lower incomes.

Tax Revenues

The money that governments procure from tax collection.

Local Governments

Administrative bodies in smaller geographical areas within a country that govern at a level below that of the state or federal government.