If You Are Convinced That Stock Prices Are Impossible to Predict

question 35

Multiple Choice

If you are convinced that stock prices are impossible to predict from available information,then you probably also believe that

• A)the efficient markets hypothesis is not a correct hypothesis.
• B)the stock market is informationally efficient.
• C)the stock market is informationally inefficient.
• D)there is no reason to establish a diversified portfolio of stocks.

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Definitions:

Course of Action

A plan or strategy designed to achieve a specific goal or solve a problem.

Differential Cost

The difference in total cost between two alternative decisions or scenarios.

Further Process

The subsequent operations or steps taken to enhance or complete the production of goods.

Variable Cost Concept

The variable cost concept implies costs that vary directly with the level of production or sales volume, such as materials and labor.