Assuming That Markets Are Semistrong Efficient,which of the Following Statements

question 79

Multiple Choice

Assuming that markets are semistrong efficient,which of the following statements is correct?

• A)All stocks should have the same expected return.
• B)Past stock prices can be successfully used to forecast future stock returns.
• C)Investors' most likely returns are those predicted by the SML, but one should not expect to do any better unless he or she has either good luck or access to information that is not publicly available.
• D)Investors should expect to earn more than the returns that are predicted by the SML, because if they do not, they should not invest in the stock market.

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Definitions:

Capitalist Society

A societal system where the means of production are largely or entirely owned by private individuals and operated for profit.

Bowles and Gintis

Sociologists known for their work on education and its role in reproducing social inequalities.

Hidden Curriculum

Unspoken or implicit lessons learned in school, outside of the official curriculum, which convey cultural norms, values, and perspectives.

Functionalists

Scholars or theorists who view society as a complex system whose parts work together to promote stability and social order.