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Questions and Answers
In an efficient market, how can higher returns be earned?
In an efficient market, how can higher returns be earned?
- By avoiding securities altogether
- By investing in low-risk securities
- By timing the market effectively
- By investing in riskier securities (correct)
What does the efficient market hypothesis imply about trade execution?
What does the efficient market hypothesis imply about trade execution?
- Trades are often delayed and complicated
- Trades require complex approvals and procedures
- Trades can be executed quickly, easily, and inexpensively (correct)
- Trades are usually costly and time-consuming
How predictable is a company's stock price if its revenues and earnings are highly predictable?
How predictable is a company's stock price if its revenues and earnings are highly predictable?
- Predictable only for institutional investors
- Unpredictable
- Highly predictable (correct)
- Predictable in the short term only
In a semi-strong efficient market, what advantage do traders with non-public information have?
In a semi-strong efficient market, what advantage do traders with non-public information have?
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Can investors skilled in exploiting behavioral errors consistently outperform the market?
Can investors skilled in exploiting behavioral errors consistently outperform the market?
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