The Theory of Efficient Markets Means

question 88

Multiple Choice

The theory of efficient markets means

• A)Professional fund managers should be able to consistently beat the market average.
• B)A professional fund manager should really not expect to beat the market average consistently.
• C)A professional fund manager who beats the market average one year should expected to beat the market average the next year.
• D)A professional fund manager who beats the market average one year should be expected to not beat the market average the next year.

Differentiate between independent, dependent, mutually exclusive, and complementary events in probability.

Calculate marginal, conditional, and joint probabilities for given events.

Apply probability concepts to compute outcomes in practical scenarios, such as success or failure of actions and event occurrences.

Delineate the concept of probability spaces and sample spaces in the context of random experiments.

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Definitions:

Intra-Entity Gain

A gain recognized when transactions occur within segments of the same company, not usually recognized for external reporting purposes until realized with an external party.

Annual Amortization Expense

The portion of the cost of an intangible asset that is expensed through an organization's income statement each year over the asset's useful life.

Consolidated Tax Return

A tax return that combines the tax liability of all subsidiary companies with that of a parent company, treating them as one entity for tax purposes.

Domestic Subsidiaries

Subsidiaries located in the same country as the parent company, operating under the laws and regulations of that country.