Asked by
Hayley Callaway
on Nov 07, 2024Verified
An efficient market implies _________________________.
A) that, on average, all investments have a negative NPV
B) that, on average, all investments have a zero NPV
C) that, on average, all investments have a positive NPV
D) that there tend to be more positive NPV investments than negative NPV investments
E) Nothing about the NPV of an investment
Efficient Market
A financial market theory suggesting that asset prices fully reflect all available information at any given time, ensuring that securities are appropriately priced and investors cannot consistently achieve higher-than-average returns.
NPV
Net Present Value, a calculation to determine the present value of future cash flows minus initial investment, used to assess the profitability of a project.
- Master the concept of market efficiency and its subdivisions: weak, semi-strong, and strong.
- Fathom the impact of the efficient market hypothesis on the performance of investments and the ability to project market directions.
Verified Answer
JT
Learning Objectives
- Master the concept of market efficiency and its subdivisions: weak, semi-strong, and strong.
- Fathom the impact of the efficient market hypothesis on the performance of investments and the ability to project market directions.