The Term "Independent Deviations from Rationality" Implies That

question 38

Multiple Choice

The term "independent deviations from rationality" implies that:

• A)irrational investors are absent from an efficient market.
• B)arbitrage traders act independent of each other.
• C)markets must be inefficient.
• D)irrational investors behave differently from one another.
• E)arbitrage traders act together to offset the actions of rational investors.

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Definitions:

Chain-style Business

A business model where multiple outlets of the same company offer the same product or service, typically under the same brand.

Franchisor

A business entity that grants the right to an individual or group to carry out commercial activities using its trademark and business model in exchange for a fee or royalty.

Franchisee

The seller of goods or services under a trade name or trademark in a franchise.

Trade Name

The name by which a business is known to the public, differing from its legal name, under which it carries out its business activities.