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If a Market Is Efficient, Then the Difference Between the Market

Question 16

Multiple Choice

If a market is efficient, then the difference between the market value of an investment and its cost is:


A) Zero.
B) Positive and greater than 1.
C) Equal to the risk premium.
D) Equal to the net present value of the cash inflows.
E) Equal to the risk-free rate of return.

Correct Answer:

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