Which of the Following Statements Is Most Correct

question 50

Multiple Choice

Which of the following statements is most correct?

• A) If a stock's beta increased but its growth rate remained the same, then the new equilibrium price of the stock will be higher (assuming dividends continue to grow at the constant growth rate).
• B) Market efficiency says that the actual realized returns on all stocks will be equal to the expected rates of return.
• C) An implication of the semistrong form of the efficient markets hypothesis is that you cannot consistently benefit from trading on information reported in The Wall Street Journal.
• D) Statements a and b are correct.
• E) All of the statements above are correct.

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Definitions:

Dixiecrats

A political party officially known as the States' Rights Democratic Party, formed in 1948 by Southern Democrats in opposition to the federal civil rights initiatives.

Taft-Hartley Act

A 1947 federal law that restricted the activities and power of labor unions, including limiting strikes and requiring union leaders to swear they were not communists.

NATO

The North Atlantic Treaty Organization is a military alliance formed for mutual defense against aggression, primarily established in 1949.

Marshall Plan

An American initiative passed in 1948 to aid Western Europe, in which the U.S. gave over $12 billion for economic recovery post-World War II to counter the spread of communism.