If the Stock Market Is Semistrong Efficient, Which of the Following

question 48

Multiple Choice

If the stock market is semistrong efficient, which of the following statements is most correct?

• A) All stocks should have the same expected returns; however, they may have different realized returns.
• B) In equilibrium, stocks and bonds should have the same expected returns.
• C) Investors can outperform the market if they have access to information which has not yet been publicly revealed.
• D) If the stock market has been performing strongly over the past several months, stock prices are more likely to decline than increase over the next several months.
• E) None of the statements above is correct.

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Definitions:

Vacation Benefits

Benefits offered by employers that provide employees with paid time off based on the length of service or other criteria.

Earn

To receive income in exchange for services rendered or as a return on investment.

Accumulate

The process of collecting or gathering an increasing quantity of a particular item or data points over time.

Post-Retirement Benefits

Benefits that an employee begins to receive after retiring from a company, including pensions, health insurance, and life insurance.