Which of the Following Activities Would Be Most Useful in an Efficient

question 21

Multiple Choice

Which of the following activities would be most useful in an efficient market?

• A) buying and holding a diversified portfolio
• B) searching for patterns in charts based on stock price movements
• C) analyzing financial ratios based on accounting data
• D) buying only securities that have performed well in the recent past

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Definitions:

Society

A group of individuals living together in a more or less ordered community, sharing customs, laws, and organizations.

Opportunity Cost

The cost of foregoing the next most desirable choice when a decision is made.

Out-of-pocket Cost

Direct payments made by individuals for goods or services, not reimbursed by insurance or other means.

Marginal Cost

Marginal Cost is the cost incurred by producing one more unit of a product or service.