According to the Efficient Markets Hypothesis

question 40

Multiple Choice

According to the efficient markets hypothesis,:

• A) everyone can outperform the stock market indexes.
• B) when one investor outperforms the stock market index, another investor must underperform.
• C) ordinary investors should always follow the advice of market geniuses like Warren Buffet.
• D) no investor can consistently outperform the stock market indexes.

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Definitions:

Net Operating Income

A financial metric indicating the income generated from a company's core business operations, excluding deductions of taxes and interest.

Turnover

The rate at which inventory or assets are sold and replaced over a certain period of time, indicating the efficiency of sales or the usage of assets.

Investment Opportunity

A potential venture or project that promises returns or profits to the investor.

Combined Margin

The total margin that results from combining the gross margin and net margin of a company.