People Will Systematically Tend to Underestimate the Level of Market

question 37

Multiple Choice

People will systematically tend to underestimate the level of market efficiency because:

• A)they tend to forget losses.
• B)they have vested interests in denying that markets are efficient.
• C)it is difficult to distinguish between ability and luck.
• D)all of the given options.

---

Definitions:

Preferred Shares

A type of stock that provides certain advantages to shareholders, such as fixed dividends and priority over common stock in asset liquidation.

Rights and Restrictions

Legal entitlements or permissions and the limitations imposed on them, often outlined in contracts or laws.

Negotiated

The process by which parties come to a mutual agreement through discussion and compromise.

Pre-emptive Rights

The right of existing shareholders in a company to have the first opportunity to purchase new shares issued by the company, to maintain their proportionate ownership.