Which of the Following Activities Would Be Most Useful in an Efficient

question 18

Multiple Choice

Which of the following activities would be most useful in an efficient market.

• A) Buying and holding a diversified portfolio.
• B) Searching for patterns in charts based on stock price movements.
• C) Analyzing financial ratios based on accounting data.
• D) Buying only securities that have performed well in the recent past.

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, considered for depreciation calculations.

Working Capital Investment

Funds used by a company to finance its day-to-day operations, including investments in inventory and accounts receivable.

Net Present Value

The calculation used to determine the current value of a series of future cash flows by discounting them at a specific rate.

Cash Inflows

Any money coming into a company from various sources, including sales, financing, and investments.