In an Efficient Market, the Expected Abnormal Return on a Security

question 48

Multiple Choice

In an efficient market, the expected abnormal return on a security is:

• A) equal to zero.
• B) equal to the risk-free return.
• C) equal to the security's required return.
• D) greater than the security's required return.

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Definitions:

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The maximum output a person or system can produce under ideal conditions, often influenced by resources, skills, and environmental factors.

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