If the Efficient Market Hypothesis Is Correct,then

question 323

Multiple Choice

If the efficient market hypothesis is correct,then

• A) index funds should typically beat managed funds,and usually do.
• B) index fund should typically beat managed funds,but usually do not.
• C) mutual funds should typically beat index funds,and usually do.
• D) mutual funds should typically bet index funds,but usually do not.

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Definitions:

Profit-maximizing Output

The level of production at which a company can achieve the highest possible profit, determined by the intersection of marginal cost and marginal revenue.

Demand

The quantity of a good or service that consumers are willing and able to purchase at each possible price level.

Cost Data

Information regarding the expenses incurred in the production, operation, or undertaking of a project, activity, or product.

Monopolistically Competitive

An arrangement in the economy where countless firms are selling products that look similar but are unique, thus permitting them a slight advantage in the market.