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Hayley Callaway
on Nov 07, 2024

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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.
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Jeremy TouitouNov 11, 2024
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