Which of the Following Statements Is True for an Efficient

question 33

Multiple Choice

Which of the following statements is true for an efficient market?

• A) The expected return in the market is 0.
• B) Information arrives randomly and independently.
• C) Mutual fund managers outperform the aggregate market.
• D) Stock prices respond gradually to information as it spreads across the country.

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Definitions:

Significance

In statistics, refers to how likely it is that a relationship observed in data would occur simply by chance.

Basal Metabolism

The rate at which the body uses energy while at rest to maintain vital functions such as breathing and keeping warm; the minimum amount of energy consumed in a resting state.

Nonparametric Methods

Statistical techniques that do not assume a specific distribution for the data, often used when data do not meet the assumptions of parametric tests.

Wilcoxon Rank Sum Procedure

A nonparametric test used to compare two independent samples to determine if they come from the same distribution.