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.

---

Definitions:

Robots

Mechanical devices programmed to perform tasks autonomously or semi-autonomously.

CEO

Chief Executive Officer; the highest-ranking executive in a company, responsible for overall management and decision-making.

Earn A Profit

Earning a profit refers to generating revenue that exceeds the costs and expenses involved in operating a business.

José Sergio Gabrielli de Azevedo

A Brazilian economist and former CEO of Petrobras, Brazil's national petroleum company.