If Markets Are Efficient, Which of the Following Investors Should

question 51

Multiple Choice

If markets are efficient, which of the following investors should achieve superior returns over time?

• A)Investors who choose stocks by throwing darts at a list of stocks in the financial pages of a newspaper
• B)Analysts who spend considerable time evaluating the best stocks to buy
• C)Mutual fund managers who manage other people's money for a living
• D)None of the options are correct.

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Definitions:

Land

In economics, it refers to all natural resources used to produce goods and services, one of the factors of production.

Profits

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

Joseph Schumpeter

An economist known for his theory on business cycles and for coining the term "creative destruction" to describe the process of innovation in economics.

Innovations

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.