When Investors Are Not Capable of Making Superior Investment Decisions

question 7

Multiple Choice

When investors are not capable of making superior investment decisions on a continual basis based on past prices, public or private information, the market is said to be:

• A)weak-form efficient.
• B)semi-strong-form efficient.
• C)strong-form efficient.
• D)fundamentally efficient.

---

Definitions:

Replacement Chain Method

A decision analysis for evaluating the replacement of assets, considering the optimal time to replace each asset.

Time Horizons

The length of time over which an investment is intended to be held or a financial goal is expected to be achieved.

Present Values

The contemporary valuation of a forthcoming sum of money or cash flows, based on a given rate of return.

Cash Inflows

Money entering a business from various sources, including sales, financing, and investment income.