Which of the Following Is the Best Statement of the Efficient

question 43

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.

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Definitions:

Reproductive Tract

The collection of internal and external organs in organisms that work together for the purpose of reproduction.

Thyroid Gland

Endocrine gland in the base of the neck that secretes thyroid hormone and calcitonin.

Thyroid Hormone

A hormone produced by the thyroid gland that regulates metabolism, energy generation, and neurological growth.

Metabolism

The set of life-sustaining chemical reactions in organisms, crucial for converting food to energy, constructing cellular components, and managing waste materials.