Which of the Following Statements Is Correct

question 78

Multiple Choice

Which of the following statements is correct?

• A) A stock is said to be in equilibrium when investors at the margin think its expected rate of return is equal to its required rate of return.
• B) According to the Efficient Markets Hypothesis,stock prices are best predicted by use of sophisticated statistical techniques such as regression analysis.
• C) The more efficient markets are,in an EMH sense,the easier it is for sophisticated investors to profit by analyzing data that companies have released to the public.
• D) The more efficient markets are,in an EMH sense,the more dangerous it would be for an investor to pick stocks at random as opposed to picking them on the basis of a careful analysis.
• E) The EMH would predict that one can "beat the market" by analyzing publicly available data,if the analyst is efficient.

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