The Efficient Markets Hypothesis Implies That

question 67

Multiple Choice

The efficient markets hypothesis implies that

• A)building a portfolio based on a published list of the "most respected" companies is likely to produce a better-than-average return.
• B)if a stock rose in price last year,it is likely to rise in price this year.
• C)managed mutual funds should generally outperform indexed mutual funds.
• D)None of the above are correct.

---

Definitions:

Activity-based Costing

Activity-based costing involves identifying and assigning costs to overhead activities and then assigning those costs to products or services based on their consumption of those activities, offering detailed insights into cost drivers.

Floral Bouquets

Arrangements of flowers often used for decorative purposes or given as gifts for special occasions, composed of various types of flowers and foliage.

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific activities, improving the accuracy of product and service pricing.

Idle Capacity

Unused production capability or facilities that could be used to produce more goods but are not currently being utilized due to lack of demand or efficiency.