If Financial Markets Are Efficient, That

question 28

Multiple Choice

If financial markets are efficient, that
Suggests that

• A) investors cannot earn superior returns
• B) investors cannot expect to outperform the market consistently
• C) security prices are random
• D) bearing additional risk will not increase return

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Definitions:

Neuron

A specialized cell transmitting nerve impulses; a nerve cell.

Feature Detectors

Neurons in the brain that identify specific characteristics of a stimulus, such as angles or movement.

Visual Cortex

The part of the cerebral cortex responsible for processing visual information, located in the back of the brain.

Hubel and Wiesel

Neurophysiologists known for their studies of the visual cortex, which showed how certain brain cells respond to edges, lines, and movements, leading to the Nobel Prize in Physiology or Medicine.