If the Financial Markets Are Highly Efficient,then

question 6

Multiple Choice

If the financial markets are highly efficient,then:

• A) investing based on technical analysis is highly recommended.
• B) holding a diversified, low-cost, passively-managed portfolio is probably your best investment strategy.
• C) you should adopt an investment strategy based on market timing.
• D) having a professional manager who actively trades your portfolio is most likely your best investment strategy.
• E) it doesn't matter which securities you invest in as all securities will provide relatively equal returns.

---

Definitions:

Covenant of Title

A guarantee in a deed to real property that the grantor has the legal right to transfer ownership.

Quiet Enjoyment

A tenant's right to occupy and use property without interference from the landlord or others with superior title.

Warranty Deed

A deed that guarantees clear title to the property and the right to sell it, providing protection to the buyer against any future claims to the property.

Dodd-Frank Act

A comprehensive and complex piece of financial reform legislation passed in 2010 in the United States, aimed at preventing future financial crises by improving accountability and transparency in the financial system.