No Particular Stock Is a Better Buy Than Any Other

question 9

Multiple Choice

No particular stock is a better buy than any other stock if

• A)stock prices are driven by investors' "animal spirits."
• B)the random-walk theory of stock prices is incorrect.
• C)the efficient markets hypothesis is correct.
• D)actively managed mutual funds always outperform index funds.

---

Definitions:

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, is due to be paid in full.

Current Price

Current Price is the present market price at which an asset or a service can be bought or sold.

Nominal Yield

The nominal yield of a bond or other fixed-income investment is the interest rate stated on the financial instrument, which does not account for inflation or the compounding of interest.

Semiannual Interest Payments

These are interest payments made twice a year on a financial instrument, such as a bond.