If the Efficient Markets Hypothesis Is Valid, Then a Person

question 262

Multiple Choice

If the efficient markets hypothesis is valid, then a person should:
I. buy mutual funds.
II. diversify.
III. follow a buy-and-hold strategy.

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, II, and III

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Definitions:

Decrease Stockholders' Equity

A reduction in the amount of capital contributed by shareholders plus retained earnings.

Financial Statement

A written record that conveys the financial activities and conditions of a business or entity, including the balance sheet, income statement, and cash flow statement.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, providing insight into its operational efficiency.

Received Utility Bill

An invoice received for the consumption of utility services such as electricity, water, or gas.