Answer:
b. Stocks that outperform the index in March always underperform it in April.
d. Stocks that outperform the index in March always outperform it in April.
Explanation:
The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.
Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.
The relationship between risk and expected return serves to allocate capital in a market. Investors want to maximize return for a given level of risk, so capital flows to its most efficient use.
There is a positive correlation between the level of risk taken and the level of return expected. The greater the risk, the greater the expected return and the greater the likelihood of suffering a large loss.
The relationship between risk and expected return is called the risk-return relationship. This is a positive relationship because the more risk you take, the higher the required return that most people demand. Risk aversion describes a positive risk-reward ratio.
Learn more about risk and expected return at
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Answer:
Companies have a corporate social responsibility towards their environment.
Explanation:
Corporate social responsibility implies that companies are expected to engage in industrial practices that would not result in harm to their environment. For example, the amount of carbon being released into the environment must be controlled as excessive release of carbon can be detrimental to health. It is also not right for waste to be discharged into the oceans because the health of the sea animals, the ocean itself and those who swim in it are at risk.
To promote sustainability, companies avoid practices that would eventually harm their environment. Abiding by these practices might take a longer route, but is eventually cost effective and beneficial.
Answer:
Option C is correct.
Explanation:
The McFadden Act which was passed by Congress in 1927 refers to a Federal legislation which ensured that authority was given to individual states to govern the bank branches that were located within the state.
The legislation also included national bank branches that were located within state lines.
This act was passed with the intention of allowing the national banks to compete with state banks by allowing them to open bank branches within state limitations.
