Which of the Following Is the Best Statement of the Efficient

question 4

Multiple Choice

Which of the following is the best statement of the efficient markets hypothesis?

• A) Competition between investors works to make the net present value (NPV) of all trading opportunities zero.
• B) Investors with information that a share has a positive net present value (NPV) will buy it, while investors with information that a share has a negative net present value (NPV) will sell it.
• C) A share's price is the aggregate of the information of many investors.
• D) Investor's decisions are dependent on complete current information of a firm's cash flows and accurate predictions of future cash flows.

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Definitions:

Due Process

The legal requirement that the state must respect all legal rights owed to a person, encompassing a fair and formal procedure.

Sexist

Prejudiced beliefs or discrimination based on a person's sex or gender, often manifesting in practices that disadvantage women.

Dismissal

The act of terminating an employee's contract or employment, often due to underperformance or disciplinary issues.

Unionized Organization

A workplace where a labor union represents the interests of the employees in negotiations with management.