Which of the Following Statements Is the Most Consistent with Evidence

question 49

Multiple Choice

Which of the following statements is the most consistent with evidence provided on the EMH?

• A)It is not clear that the market can be expected to respond positively to unexpected good news.
• B)Anomalies have a great capacity to generate risk-adjusted excess returns for an investor.
• C)Event tests are joint tests of the asset-pricing model used and market efficiency.
• D)Financial managers of small companies should interpret this evidence as an indication that shares of small companies are under-priced and shares of large companies are over-priced.

---

Definitions:

Defenses

Legal strategies and arguments used by defendants in a lawsuit or criminal case to counteract or negate the claims made by the plaintiff or prosecution.

Bystander Theory

A legal theory suggesting a person or entity may be liable for injuries to a bystander caused by their failure to control or warn about hazards they are responsible for.

Warning Label

A label on a product that indicates potential hazards to consumers and outlines measures to prevent accidents or injuries.

Strict Product Liability

A legal doctrine that holds manufacturers, distributors, or sellers liable for damages caused by defective products, regardless of fault or negligence.