If the Efficient Market Hypothesis Holds, Investors Should Expect

question 21

Multiple Choice

If the efficient market hypothesis holds, investors should expect:

• A)to earn only a normal return.
• B)to receive a fair price for their securities.
• C)to always be able to pick stocks that will outperform the market averages.
• D)Both A and B.
• E)Both B and C.

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Definitions:

Abortion

The medical termination of a pregnancy before the fetus is capable of independent life.

Embryo

An embryo is an early stage of development in multicellular organisms, following fertilization and before becoming a fetus.

Genetic Engineering

The direct manipulation of an organism's genes using biotechnology to alter its characteristics in a specific way.

Prenatal Abnormalities

Any deviations from normal development in an embryo or fetus before birth.