People Who Accept the Efficient Markets Hypothesis Should

question 55

Multiple Choice

People who accept the efficient markets hypothesis should:

• A) buy a large number of stocks from different companies and hold them for a long period.
• B) buy a small number of stocks from several companies, selling the stocks whose price has fallen and keeping the rest.
• C) buy stocks only at a low price and sell them when their prices have increased by more than the market average.
• D) constantly buy and sell stocks to avoid the risk of large price swings.

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Definitions:

Weaknesses

Refers to the areas or aspects where an individual or entity may lack strength or proficiency.

Grapevine

An informal and unofficial communication channel within an organization, through which information, rumors, and gossip are typically spread.

Trust

A strong conviction in someone or something's reliability, truthfulness, capability, or robustness.