If the Efficient Markets Hypothesis Is Valid, Then a Person

question 262

Multiple Choice

If the efficient markets hypothesis is valid, then a person should:
I. buy mutual funds.
II. diversify.
III. follow a buy-and-hold strategy.

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

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Definitions:

Entrepreneurs

Individuals who create, launch, and manage new businesses, often taking on considerable risk in the expectation of profit.

Bankruptcy

A legal process involving a person or business that is unable to repay outstanding debts, resulting in the distribution of assets to creditors.

Equity Financing

Exchanging ownership shares for outside investment monies.

Ownership Shares

Portions of equity in a company or financial assets which demonstrate an individual's or entity's part ownership.