If the Markets Are Efficient, Which of the Following Investors

question 51

Multiple Choice

If the markets are efficient, which of the following investors should have above normal return on assets over time?

• A) Those who choose their stocks by throwing darts at a list of stocks found in the financial pages of a newspaper.
• B) Analysts who spend considerable time evaluating the best stocks to buy.
• C) Mutual fund managers who manage other people's money for a living.
• D) None of the above

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Definitions:

MC

The additional cost incurred for producing one more unit of a good or service; it's synonymous with marginal cost.

Marginal Cost

is defined as the increase in total production cost that arises from producing an additional unit of a good or service.

TVC

Total Variable Costs, which are the sum of expenses that vary directly with the level of production or business activity.

TFC

Total Fixed Costs, which are the sum of all costs that remain constant regardless of the level of production or output.