Which Group of Investors Is Capable of Earning Consistent, Superior

question 95

Multiple Choice

Which group of investors is capable of earning consistent, superior profits if financial markets are semistrong-form efficient? Ignore any legal considerations.

• A) Technical analysts
• B) Fundamental analysts
• C) Company insiders
• D)Mutual fund managers

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Definitions:

Net Present Value

A valuation method that calculates the value of future cash flows in today's dollars by discounting them at a particular rate.

Internal Rate Of Return

The critical interest rate that nullifies the net present value of cumulative cash flows from a project.

Discount Rate

The interest rate charged to banks for borrowing short-term funds directly from the Federal Reserve, or broadly, the interest rate used to discount future cash flows to present value.