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:

Referent Power

A form of influence based on the leader's personal traits, where followers are drawn by admiration, respect, or identification with the leader.

Informational Power

A form of influence based on controlling access to, or possession of, valuable knowledge or information.

Coercive Power

A form of influence where a person or group uses threats of punishment or actual punishment to induce behavior change in others.

Bases Of Power

Conceptual framework identifying different sources of power within organizational and interpersonal dynamics, such as coercive, reward, legitimate, expert, and referent power.