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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Definitions:

Ingratiation

A social influence strategy where an individual attempts to make oneself more likeable to another, often through flattery or the offering of praise.

Indirect

A method or approach that is not straightforward or direct, often involving secondary or alternative means to achieve an end.

Evasion

The act of avoiding something undesired, such as responsibilities, questions, or physical obstacles, often through skill or deceit.

Bilateral

Involving two sides or parties, often referring to agreements, communications, or relationships that involve direct interaction between two individuals or groups.