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QUESTION 18 Which of the following statements is inconsistent with evidence provided on the Efficient Markets Hypothesis? A

Finance Sep 04, 2020

QUESTION 18 Which of the following statements is inconsistent with evidence provided on the Efficient Markets Hypothesis? A. Most investors should adopt a passive buy-and-hold strategy, most of the time. B. Access to private information can provide consistent abnormal returns. C. Technical analysis is a worthwhile trading strategy for most investors. D. Fundamental analysis is not a worthwhile trading strategy for most investors
The average investor avoids: A. low liquidity and stable cash flows B. high return and high risk C. low return and low risk OD. low liquidity and uneven cash flows

Expert Solution

18.Efficient market hypothesis advocates that there is no possibility of making higher rate of return through technical analysis or fundamental analysis.

Hence, technical analysis would not be of any use in Efficient market.

Correct answer is option (C) technical analysis is a worthwhile trading strategy for most investor.

19. An average investor will be avoiding low liquidity and uneven cash flows because it will be leading to higher rate of risk.

Correct answer will be option (d) low liquidity and uneven cash flows.

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