Which of the Following Statements Is Most Correct

question 86

Multiple Choice

Which of the following statements is most correct?

• A) If a market is strong-form efficient this implies that the returns on bonds and stocks should be identical.
• B) If a market is weak-form efficient this implies that all public information is rapidly incorporated into market prices.
• C) If your uncle earns a return higher than the overall stock market, this means the stock market is inefficient.
• D) Both answers a and b are correct.
• E) None of the above answers is correct.

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Definitions:

NPV

Net Present Value, a calculation used to determine the present value of a series of future cash flows minus the initial investment, utilized in capital budgeting to assess the profitability of an investment.

Least-Cost Decision

A decision-making process focused on selecting the option that requires the lowest financial outlay while still achieving the desired result.

Economic Profit-Maximising

The strategy of adjusting the output and pricing of goods or services to achieve the highest possible profit, taking both explicit and implicit costs into account.

Total Revenue

The entire amount of income generated by the sale of goods or services before any expenses are subtracted.