An important implication of the idea that markets are efficient is that
A) an investor can make money by buying undervalued stocks and selling overvalued ones.
B) the price of a share immediately incorporates new publicly available information that affects its value.
C) dealers can ignore some new information on a share that affects its value.
D) an investor can make above average returns in the stock market by doing careful research of public information about selected stocks.
B
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If both the goods and the labor market are perfectly competitive, a firm that hires labor up to a point where the value of marginal product of labor equals the wage rate also produces at a point where price is:
A) equal to average cost. B) equal to marginal cost. C) less than marginal cost. D) higher than marginal cost.
In an open economy, a decrease in net exports because of reduced demand for domestic products by foreigners should cause the domestic real interest rate to ________ and should cause desired saving minus desired investment to ________
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Suppose you borrow $1,000 from your bank to pay for a bike. This is an example of
A) direct financing. B) indirect financing. C) moral hazard. D) transaction costs.
Refer to the accompanying figure. An increase in supply is represented by a shift from:
A. curve C to curve D. B. curve B to curve A. C. curve A to curve B. D. curve C to curve B.