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.

---

Definitions:

Defense Mechanisms

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Obsessions

Persistent, unwanted thoughts, urges, or images that cause distress or anxiety.

Compulsions

Repetitive behaviors or mental acts that an individual feels driven to perform in response to an obsession or according to rigid rules.

Related

Having a connection or association with something else, either by blood, context, or similarity.