If Security Markets Were Truly Strong-Form Efficient, You Would Never

question 6

True/False

If security markets were truly strong-form efficient, you would never be able to realize a rate of return on a security greater than the marginal investor's expected (or required) rate of return.

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Definitions:

Variable Life Insurance

A type of life insurance where the policyholder can allocate a portion of premium dollars to a separate account comprised of various investment funds.

Universal Life Policies

A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element, which is invested to provide a cash value buildup.

Defined Contribution Plans

Retirement plans where the amount invested is defined up front, but the future benefit is not guaranteed, depending on investment performance.

Pension Funds

Financial programs that collect and invest contributions from employers and employees to provide retirement benefits to the employees.