Which of These Are Arguments That Support the Position That

question 39

Multiple Choice

Which of these are arguments that support the position that the efficient market hypothesis fails in actual application?
I.Arbitrage may involve too much risk to offset irrational behaviour
II.Investors may be irrational
III.Irrationalities are contervailing
IV.Irrationality may be related across investors

• A)II only
• B)I and II only
• C)I,II,and IV only
• D)II,III,and IV only
• E)I,II,III,and IV

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Definitions:

Alternative Hypothesis

A hypothesis used in hypothesis testing that proposes there is a significant difference between the observed data and the null hypothesis.

Standard Error

The standard deviation of the sample distribution of a statistic, used to estimate the accuracy of the sample mean as a predictor of the population mean.

Sample Proportion

The fraction or percentage of the sample that represents part of a particular category or characteristic of interest.

Null Hypothesis

A hypothesis that assumes no significant difference or effect in the context of an experiment or test.