Which of the Following Statements About Capital Markets Is True

question 13

Multiple Choice

Which of the following statements about capital markets is true?

• A) Systematic risk refers to the risk arising from a firm's financing decision.
• B) Returns of high-beta stocks tend to vary less than overall market prices.
• C) The efficient market hypothesis states that it is not possible to consistently 'beat the market' by using publicly available information.
• D) If the efficient market hypothesis were true,it would be impossible to make money in the stock market.

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Definitions:

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.

Pleasant Consequence

A positive outcome or reward that follows a desired behavior, often used in reinforcing such behavior.

Positive Reinforcement

in behavioral psychology, it is the introduction of a rewarding stimulus following a desired behavior, encouraging its repetition.

Punish Openly

The act of enforcing a penalty or discipline in a public or transparent manner, often as a deterrent to others.