According to the Efficient Markets Hypothesis, Professional Investors Will Earn

question 55

Multiple Choice

According to the efficient markets hypothesis, professional investors will earn:

• A)excess profits over the long-term.
• B)excess profits, but only on short-term investments.
• C)a dollar return equal to the value paid for an investment.
• D)a return that cannot be accurately predicted because investments are subject to the random movements of the markets.
• E)a return that "beats the market."

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Definitions:

Pooled Variance T-test

A statistical test that combines the variances of two samples to test the hypothesis that the means of two populations are equal under the assumption of equal variances.

Degrees Of Freedom

The number of independent pieces of information in a dataset available for estimating parameters or calculating a statistic, usually defined as the number of observations minus the number of parameters being estimated.

Independent Populations

Populations that have no interaction with each other, implying that the sample from one population is not influenced by the other.

Equal Variances

A condition in statistical analysis where the variances across different groups are assumed to be the same.