Which Principle Explains Why It Is Hard to Beat the Market

question 132

Multiple Choice

Which principle explains why it is hard to beat the market?

• A) technical investing principle
• B) efficient markets hypothesis
• C) systematic risk evaluation principle
• D) buy and hold principle

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Definitions:

Bonds

Debt securities issued by entities such as corporations or governments to raise capital, promising to pay back the principal along with interest on specified dates.

European-Style Option

A contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on the expiration date only.

Expiration Date

The date on which an option, right, or derivative instrument becomes void and the rights under it no longer apply.

Glaxo Stock

Equity shares issued by GlaxoSmithKline, a global healthcare company, representing ownership in the company.