The Theory of Efficient Markets

question 94

Multiple Choice

The theory of efficient markets:

• A) rules out high returns due to chance.
• B) says insider information makes markets less efficient.
• C) allows for higher than average returns if the investor takes higher than average risk.
• D) assumes people have equal luck.

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Definitions:

Product-Mix

The total range of products that a company offers to sell, including all its product lines, variants, and items.

New-Product Characteristic

Features or attributes that define a newly launched product, distinguishing it from existing products in the market.

Potential Customer's Needs

Represents the specific requirements or preferences of potential buyers that businesses aim to meet with their products or services.

Product Knowledge

The understanding of a product's features, benefits, applications, and uses, which is crucial for effective sales and marketing efforts.