Which One of the Following Would Best Justify an Investor

question 26

Multiple Choice

Which one of the following would best justify an investor hiring an active portfolio manager even though markets have been shown to be semistrong-form efficient?

• A) the existence of market "anomalies" have been discovered
• B) analysts have incorporated relevant information quickly and accurately
• C) technical trading rules have been proven to be ineffective
• D) the results from studies on efficiency are debatable and not universally accepted

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead rate multiplied by the actual activity level.

June

The sixth month of the year in the Gregorian calendar, often associated with the start of summer in the northern hemisphere.

Materials Price Variance

A measure of the difference between the actual cost of materials and the standard cost, multiplied by the actual quantity of materials used.

January

January is the first month of the year in the Gregorian and Julian calendars, characterized by cold weather in the northern hemisphere and warm weather in the southern hemisphere.