If the Stock Market Is Efficient Then

question 5

Multiple Choice

If the stock market is efficient then:

• A)investors should consider factors,such as risk preferences,when selecting a portfolio of securities.
• B)investors should select their investments randomly since all securities are correctly priced anyway.
• C)a portfolio of randomly selected securities will necessarily eliminate all unsystematic risk.
• D)portfolio selection becomes easy since all information is impounded in share prices.

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Definitions:

Cooperative Play

A stage of play development where children play together, creating and organizing games and activities with shared goals and understanding.

Common Goals

Shared objectives or aims among individuals or groups that guide actions and foster collaboration towards achieving a specific outcome.

Independently

Acting or functioning without dependence on others; autonomously.

Observing

The act of carefully watching and examining phenomena, environments, or behaviors to gather information.