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:

Retrospectively

A method of application where the rules or standards are applied to actions, transactions, or situations that have occurred in the past.

Retrospective Restatement

The process of revising previously issued financial statements to correct errors or to reflect changes in accounting policies, as if the new information had been known at the original reporting date.

Material Error

A significant mistake in financial reporting that could influence the economic decisions of users of the financial statements.