If in an Efficient Market All Prices Are Correct and Reflect

question 76

Multiple Choice

If in an efficient market all prices are correct and reflect market fundamentals,which of the following is a false statement?

• A) A stock that has done poorly in the past is more likely to do well in the future.
• B) One investment is as good as any other because the securities' prices are correct.
• C) A security's price reflects all available information about the intrinsic value of the security.
• D) Security prices can be used by managers to assess their cost of capital accurately.

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Definitions:

Unique Values

Distinctive qualities or principles held by an individual, organization, or product that set them apart from others.

African American

An ethnic group in the United States with total or partial ancestry from any of the black racial groups of Africa.

Buying Patterns

The habits or tendencies of consumers in acquiring goods or services, which can reveal preferences and frequency.

Clothing Products

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