One Important Implication of the Efficient Markets Hypothesis Is That

question 8

Multiple Choice

One important implication of the efficient markets hypothesis is that:

• A) investors should hold a diversified portfolio and avoid active trading.
• B) investors can benefit by engaging in day trading.
• C) investors should trade actively help to ensure the highest overall gain in their portfolios.
• D) all of the above.

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Definitions:

Transference Behaviors

In psychotherapy, the phenomenon where clients project feelings and attitudes from past relationships onto the therapist.

Thought Patterns

The habitual ways in which one tends to think or process information, which can influence behavior and emotions.

Psychoanalysis

A therapeutic technique and theory of psychological disorders, emphasizing unconscious conflicts and childhood experiences.

Cognitive Therapies

Psychological treatments that focus on changing faulty or irrational thinking patterns, beliefs, and attitudes.