If the Financial Markets Are Highly Efficient,then

question 6

Multiple Choice

If the financial markets are highly efficient,then:

• A) investing based on technical analysis is highly recommended.
• B) holding a diversified, low-cost, passively-managed portfolio is probably your best investment strategy.
• C) you should adopt an investment strategy based on market timing.
• D) having a professional manager who actively trades your portfolio is most likely your best investment strategy.
• E) it doesn't matter which securities you invest in as all securities will provide relatively equal returns.

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Definitions:

Beginning Inventory

The value of all inventory held by a company at the start of an accounting period.

Net Income

The conclusive financial gain of a company post all deductions for expenses and taxes from the revenue.

Understated

Described or estimated below the actual size, quantity, or importance.

FOB Shipping Point

A term indicating that the buyer assumes responsibility for the goods and the costs of transportation at the point of departure from the seller's shipping dock.