The Theory by Which People Optimally Use All Available Information

question 83

Multiple Choice

The theory by which people optimally use all available information when forecasting the future is known as

• A)rational expectations.
• B)perfect expectations.
• C)credible expectations.
• D)predictive expectations.

---

Definitions:

Portfolio

A collection of investments, such as stocks, bonds, and other financial assets, held by an individual or institution.

Funds

Financial assets or resources saved or made available for a specific purpose or investment.

Beta

A measure of a stock's volatility in relation to the overall market; it indicates the risk associated with a security’s returns in comparison to the market's returns.

Portfolio

A collection of investments held by an individual or an institution which may include stocks, bonds, real estate, and other financial assets.