If the Securities Market Is Efficient,an Investor Need Only Throw

question 40

Multiple Choice

If the securities market is efficient,an investor need only throw darts at the stock pages to pick securities and be just as well off as they would be with a professionally-developed portfolio.This statement is:

• A)true because there would be no significant difference in risk and return.
• B)true because in an efficient stock market all portfolios earn the market rate of return.
• C)false because professionals guarantee higher returns given the same level of risk.
• D)false because investors may not hold a desirable risk-return combination.
• E)false because the markets are controlled by the institutional investors.

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Definitions:

Team Leadership Skill

The ability to guide, motivate, and lead a team towards achieving its objectives, fostering collaboration, and managing dynamics effectively.

Decision Method

A systematic approach or process used in making choices between alternatives.

Decentralized Communication Network

A pattern of interaction that allows all members to communicate directly with one another.

High Interdependency

A situation or system where components or individuals rely heavily on each other to function successfully.