Which One of These Statements Is Correct

question 20

Multiple Choice

Which one of these statements is correct?

• A)Irrationality may be related across investors.
• B)Arbitrage is risk-free.
• C)Irrationality always cancels out among a group of investors.
• D)Investors are always rational.
• E)Arbitrage eliminates all market inefficiencies.

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Definitions:

Advance Premium

Payment made in advance for insurance coverage, often resulting in a discount or ensuring the policy remains active without interruption.

Workers' Compensation

An insurance scheme designed to provide medical assistance and compensate for lost wages to employees injured during their work.

General Journal

A primary accounting record where financial transactions are recorded in chronological order, before being posted to specific accounts in the general ledger.

Normal Balance

The account side (either debit or credit) that documents the account's increases, based on the type of account.