The ________________ States That in Equilibrium, Prices of Financial Instruments

question 51

Multiple Choice

The ________________ states that in equilibrium, prices of financial instruments reflect all available information.

• A)efficient markets hypothesis
• B)stronger version of the efficient markets hypothesis
• C)fundamental value theory
• D)rational expectation theory.

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Definitions:

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.

Salvage Value

The estimated residual value of an asset at the end of its useful life, representing what it could be sold for or scrapped.

Technologically Obsolete

Refers to products, services, or technology that have become outdated or no longer maintain a competitive advantage due to advancements in technology.

Simple Rate Of Return

A method to evaluate an investment's efficiency by dividing the annual incremental net operating income by the initial investment cost.