If the Efficient Market Hypothesis Holds,investors Should Expect

question 12

Multiple Choice

If the efficient market hypothesis holds,investors should expect:

• A) to earn only a normal return.
• B) to receive a fair price for their securities.
• C) to always be able to pick stocks that will outperform the market averages.
• D) Both to earn only a normal return; and to receive a fair price for their securities.
• E) Both to receive a fair price for their securities; and to always be able to pick stocks that will outperform the market averages.

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Definitions:

Stage Perspective

A viewpoint in developmental psychology that suggests individuals progress through a series of discrete stages of cognitive or emotional development.

Stage Theory of Development

A theory that proposes human development happens in distinct stages, each characterized by specific cognitive, social, or moral developments.

Predictable Order

A sequence of events or stages that occur in a consistent and known pattern, allowing for anticipation of what comes next.

Sensitive Periods

Critically defined periods in early development when the individual is especially receptive to certain stimuli and learning experiences.