If Security Markets Are Totally Efficient,the Best Common Stock Strategy

question 2

Multiple Choice

If security markets are totally efficient,the best common stock strategy to take is:

• A)an asset allocation approach.
• B)the modern portfolio theory.
• C)an active strategy.
• D)a passive strategy.

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Definitions:

Liability

A financial obligation or debt owed by a company or individual to another entity, payable in money, goods, or services.

Account Type

Categories under which financial transactions are recorded, such as assets, liabilities, equity, revenue, and expenses.

Prepaid Rent

Expenses paid in advance for the use of property or equipment that is recorded as an asset until the period it benefits.

Balance Sheet

A financial outline showing the holdings, debts, and the portion belonging to shareholders of a company on a certain date.