The Efficient-Market Hypothesis

question 30

Multiple Choice

The efficient-market hypothesis

• A) implies that security prices properly reflect information available to investors.
• B) has little empirical validity.
• C) implies that active traders will find it difficult to outperform a buy-and-hold strategy.
• D) has little empirical validity and implies that active traders will find it difficult to outperform a buy-and-hold strategy.
• E) implies that security prices properly reflect information available to investors and that active traders will find it difficult to outperform a buy-and-hold strategy.

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Definitions:

Volcanic Origin

Refers to landscapes, geological features, or materials that have formed as a result of volcanic activity, including eruptions, lava flows, and ash deposits.

Seafloor

The bottom of the ocean, covering a vast area and including features like plains, mountains, and trenches.

Continental Shelves

The underwater landmasses that extend around the continents, typically extending from the shore to a drop-off point known as the shelf break.

Abyssal Plains

Large, flat areas of the ocean floor that are among the deepest, most remote parts of the Earth's surface.