The Efficient Markets Hypothesis Suggests That Investors

question 2

Multiple Choice

The efficient markets hypothesis suggests that investors

• A)should purchase no-load mutual funds which have low management fees.
• B)can use the advice of technical analysts to outperform the market.
• C)let too many unexploited profit opportunities go by if they adopt a "buy and hold" strategy.
• D)act on all "hot tips" they hear.

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Definitions:

Checking Accounts

Bank accounts that allow the owner to make deposits, write checks, and withdraw funds with ease, typically used for daily transactions.

Liquid Investment Assets

Assets that can be quickly converted into cash with minimal impact on their price, such as stocks and bonds.

Internal Controls

Processes and procedures implemented to assure integrity and accuracy of financial and operational information, prevent fraud, and protect the assets of the organization.

Certification

The process of officially recognizing someone or something as having met certain standards through the issuance of a document or label.