The Efficient Markets Hypothesis Predicts That an Investor

question 105

Multiple Choice

The efficient markets hypothesis predicts that an investor

• A) will not be able consistently to earn above-normal profits from buying or selling stocks.
• B) will be able consistently to earn above-normal profits from buying or selling stocks so long as he or she makes use of rational expectations.
• C) will be able consistently to earn above-normal profits from buying or selling stocks so long as he makes use of adaptive expectations.
• D) will be able consistently to earn above-normal profits so long as stock prices in general are rising.

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Definitions:

Group Members

Individuals who are part of a group or team, sharing common goals and collectively contributing to tasks or discussions.

Opposite Traits

Characteristics or qualities that are distinctly different or contrary to each other within an individual’s personality or behavior.

Visionary Leader

A leader who has a clear, distinctive, and specific vision for the future, combined with the ability to communicate and inspire others to achieve it.

Global Market Share

The percentage of an industry's sales or revenues generated by a company, determined on a global scale.