A Finding That _________ Would Provide Evidence Against the Semistrong

question 58

Multiple Choice

A finding that _________ would provide evidence against the semistrong form of the efficient-market theory.

• A) low P/E stocks tend to have positive abnormal returns
• B) trend analysis is worthless in determining stock prices
• C) one can consistently outperform the market by adopting the contrarian approach exemplified by the reversals phenomenon
• D) low P/E stocks tend to have positive abnormal returns and trend analysis is worthless in determining stock prices
• E) low P/E stocks tend to have positive abnormal returns and one can consistently outperform the market by adopting the contrarian approach exemplified by the reversals phenomenon

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Definitions:

Marginal Product

The increase in output resulting from an additional unit of input, while keeping other inputs constant.

Total Product

The total quantity of output produced by a firm for a given quantity of inputs.

Maximize Profit

The strategy or process aimed at achieving the highest possible profit from business activities, considering revenues and expenses.

Marginal Productivity

A measure of the extra amount of output that is produced when a unit of input (like labor or capital) is added, with all other inputs held constant.