Which of the Following Is Not an Approach to Assigning

question 94

Multiple Choice

Which of the following is not an approach to assigning probabilities?

• A)Classical approach
• B)Trial-and-error approach
• C)Relative frequency approach
• D)Subjective approach

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Definitions:

Liquidity

The ease with which an asset can be quickly bought or sold in the market without affecting its price.

Small-Firm Effect

The observed phenomenon that, on average, smaller firms have historically provided higher risk-adjusted returns than larger firms.

Book-To-Market Effect

The tendency for securities with high book-to-market ratios to outperform those with low ratios.

Semistrong Form

A theory in the Efficient Market Hypothesis that postulates all publicly available information is already reflected in stock prices, including historical data and new public information.