The theory of efficient markets: A. rules out high returns due to chance. B. says insider...
The theory of efficient markets:
A. rules out high returns due to chance.
B. says insider information makes markets less efficient.
C. allows for higher than average returns if the investor takes higher than average risk.
D. assumes people have equal luck.
Homework Answers
Answer
Option C
C. allows for higher than average returns if the investor takes higher than average risk.
the theory of efficient markets allows for higher than average returns if the investor takes higher than average risk.
As theory depend on the risk premium and returns as the risk is higher then the return is higher is the efficient market hypothesis suggests.
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Which of the following statements is CORRECT?
1.
An investor can eliminate virtually all diversifiable risk if
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stocks.
2.
Once a portfolio has about 40 stocks, adding additional stocks
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3.
It is impossible to have a situation where the market risk of
a single stock is less than that of a portfolio that includes the
stock.
4.
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