According to the Efficient Markets Hypothesis

question 40

Multiple Choice

According to the efficient markets hypothesis,:

• A) everyone can outperform the stock market indexes.
• B) when one investor outperforms the stock market index, another investor must underperform.
• C) ordinary investors should always follow the advice of market geniuses like Warren Buffet.
• D) no investor can consistently outperform the stock market indexes.

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Definitions:

Understatement

An error in financial reporting where the value of a figure is reported lower than its actual amount.

Inventory Turnover

A measure of how frequently a company's inventory is sold and replaced over a period.

Cost of Goods Sold

Expenses directly related to manufacturing goods for sale by a business, covering both material and labor expenses.

Inventory

The raw materials, work-in-progress goods, and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.