An Investment Theory Based on the Assumption That a Stock's

question 112

Multiple Choice

An investment theory based on the assumption that a stock's market value is determined by the forces of supply and demand in the stock market as a whole is called the ________ theory.

• A)fundamental
• B)technical analysis
• C)efficient market
• D)primary
• E)market

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Definitions:

Adverse Selection

A situation in which one party in a transaction has more information than the other, leading to an imbalance and potentially poor market outcomes, commonly seen in insurance markets.

Insurance

A financial product or agreement that provides compensation for specific losses or damages in return for payments made.

High Risk

Refers to situations or investments that have a high potential for loss or failure.

Average Premium

The mean amount paid for insurance coverage across a defined set of policies, reflecting the average cost to the insured.