Which of the Following Statements Related to Market Efficiency Tends

question 13

Multiple Choice

Which of the following statements related to market efficiency tends to be supported by current evidence?
I.Markets tend to respond quickly to new information.
II.It is difficult for the typical investor to earn above-average returns without taking above-average risks.
III.Short-run prices are difficult to predict accurately based on public information.
IV.Markets are most likely weak form efficient.

• A) I and III only
• B) II and IV only
• C) I and IV only
• D) I, III, and IV only
• E) I, II, and III only
• F) None of the above.

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Definitions:

Payback Period

The time required for the return on an investment to "pay back" the sum of the original investment, commonly used as a measure of investment risk.

Profile

A description or analysis of the characteristics, qualities, or activities of a person, organization, or thing.

Net Present Value

A financial metric that calculates the present value of all cash inflows and outflows of a project or investment, using a specific discount rate.

Internal Rate

Commonly signifies the internal rate of return (IRR), identified as the discount rate that sets the net present value (NPV) of all cash flows pertaining to a specific project at zero.