Which of the Following Is the Best Statement of the Efficient

question 35

Multiple Choice

Which of the following is the best statement of the efficient markets hypothesis?

• A)Investors with information that a stock had a positive net present value (NPV)will buy it,while investors with information that a stock had a negative net present value (NPV)will sell it.
• B)Investor's decisions are dependent on complete current information of a firm's cash flows and accurate predictions of future cash flows.
• C)Competition between investors works to make the net present value (NPV)of all trading opportunities zero.
• D)A share's price is the aggregate of the information of many investors.
• E)Investors should only buy stocks with a positive net present value (NPV).

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Definitions:

Memory Construction

The process of forming new memories, which includes the encoding, storage, and retrieval of information.

Proactive Interference

The phenomenon where older memories hinder the recall of newer memories.

Anterograde Amnesia

The loss of the ability to create new memories after the event that caused the amnesia, leading to a partial or complete inability to recall the recent past.

Digitally Altered Photos

Images that have been modified using digital software to change their appearance, which can impact perceptions and attitudes.