Which of the Following Statements Is TRUE

question 124

Multiple Choice

Which of the following statements is TRUE?

• A) In the long run, stock returns are higher than bond returns.
• B) Passive investments underperform active investments.
• C) One can earn higher returns by investing in funds with high loading costs.
• D) The efficient markets hypothesis only holds in the short run.

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Definitions:

Journal Entry

A record in the books of accounts that documents a financial transaction, showing the debit and credit effects.

Interest Expense

Costs incurred by an entity for borrowed funds, which are typically reported on the income statement within the financing or operating sections.

Notes Payable

A written promise to pay a specified amount of money, typically with interest, by a certain date, recorded as a liability on the balance sheet.

Cash

Refers to currency or assets that can rapidly be converted to currency, used by businesses for transactions and considered a current asset on the balance sheet.