Which of the following statements concerning market efficiency is correct? I. An efficient market accurately aggregates...

Which of the following statements concerning market efficiency is correct? I. An efficient market accurately aggregates information. II. In an efficient market, portfolio managers add value by conducting detailed financial analyses of firm fundamentals. III. In an efficient market, the only way to earn higher returns is to take on more risk. IV. In the most extreme version of the efficients market hypothesis, only insiders can earn excess returns.

Solutions

Expert Solution

Ans I. An efficient market accurately aggregates information, III. In an efficient market, the only way to earn higher returns is to take on more risk.

Both point I and III are correct.

Points II, IV are incorrect.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Which of the following statements concerning income taxation of estates and trusts is correct? I. An...

Which of the following statements concerning income taxation of estates and trusts is correct? I. An estate is a separate taxpaying entity. II. Income distributed by a trust to an income beneficiary of the trust is taxable to the trust. III. The executor or administrator of an estate is responsible for filing an income tax return for the estate annually. Group of answer choices I, II, and III II only Both I and III I only

Applying the Efficient Market Hypothesis (EMH) to capital budgeting, which of the following statements is correct? ...

Applying the Efficient Market Hypothesis (EMH) to capital budgeting, which of the following statements is correct? a. In an efficient market the NPV for projects should on average be positive. b. Existing large firms can be considered evidence that the EMH is true. c. Existing large firms may exist because they may not have played the game long enough meaning they may still go insolvent. d. Firms can be considered to be a collection of projects; and existing firms a...

Applying the Efficient Market Hypothesis (EMH) to capital budgeting, which of the following statements is correct? ...

Applying the Efficient Market Hypothesis (EMH) to capital budgeting, which of the following statements is correct? Group of answer choices In an efficient market the NPV for projects should on average be positive. Existing large firms can be considered evidence that the EMH is true. Existing large firms may exist because they may not have played the game long enough meaning they may still go insolvent. Firms can be considered to be a collection of projects; and existing firms a...

Which of the following statements is correct? A. There are no efficient or optimal levels of...

Which of the following statements is correct? A. There are no efficient or optimal levels of risk. B. There are efficient or optimal levels of risk. C. Risk is less costly than the cost associated with the management of risk. D. Risk can’t be effectively managed.

Which of the following statements concerning rules that apply to 401(k) plans is (are) correct? I....

Which of the following statements concerning rules that apply to 401(k) plans is (are) correct? I. The results of the ADP test can limit the available salary deferrals for the highly compensated employees. II. A plan must pass both the 1.25 ADP and the 2.0 ADP tests in order to not be in violation of regulations. Group of answer choices II only I only Neither I not II Both I and II

Which of the following statements concerning risk are correct? I. Systematic risk is measured by beta....

Which of the following statements concerning risk are correct? I. Systematic risk is measured by beta. II. The risk premium of a risky asset increases as diversifiable risk increases. III. Systematic risk is another name for nondiversifiable risk. IV. Diversifiable risks are systematic risks you cannot avoid. A.I and III only B.II and IV only C.I and II only D.III and IV only E.I, II, and III only

Which of the following statements is correct concerning a SIMPLE plan?

1 Which of the following statements is correct concerning a SIMPLE plan?A SIMPLE plan has more complex administration than a 401(k).A SIMPLE plan has only a few options for employer matching percentages, while a 401(k) has no limit to the matching percentage.A SIMPLE is best used with a large to medium sized company.Both SIMPLE plans and 401(k)s permit plan loans.2 An employer can sponsor both a SIMPLE and a money-purchase pension plan.TrueFalse

Which one of the following statements is correct concerning these loans?

First Bank offers personal loans at 7.6 percent compounded monthly. Second Bank offers similar loans at 7.75 percent compounded semi-annually. Which one of the following statements is correct concerning these loans?Group of answer choicesThe First Bank loan has an effective rate of 7.67 percent.The Second Bank loan has an effective rate of 8.03 percent.The annual percentage rate for the Second Bank loans is 7.90 percent.Borrowers should prefer the loans offered by Second Bank.The First Bank offers the best deal on...

Which of the following statements is NOT correct concerning the Cash Budget?

Which of the following statements is NOT correct concerning the Cash Budget? A) The Cash Budget builds on earlier budgets and schedules as well as additional data. B) The Cash Budget should be prepared before the Budgeted Income Statement. C) The Cash Budget should be prepared before the Budgeted Balance Sheet. D) It is not necessary to prepare any other budgets before preparing the Cash Budget

Which of the following statements concerning effective nuclear charge are correct? I: The most outer electrons...

Which of the following statements concerning effective nuclear charge are correct? I: The most outer electrons in O2− and F− experience the same effective nuclear charge II: For carbon, the 2s electrons experience a greater effective nuclear charge than the 2p electrons. III: In lithium, all three electrons experience an identical effective nuclear charge. Answer is II. only , please explain

Subjects