A middle- aged couple earns more than sufficient cash for their current needs from their employment. They invest in shares to create a fund for their retirement. Which of the following best describes a suitable policy for the couple in efficient capital markets?

Question

Quizplus · Accepted Answer

Investing in companies that pay low dividends and retain earnings to invest in projects can be beneficial in efficient capital markets, as these companies are likely to reinvest their earnings in profitable projects, potentially leading to capital growth. This approach aligns with the couple's goal of creating a retirement fund, as the focus is on long-term growth rather than immediate income.

A Middle- Aged Couple Earns More Than Sufficient Cash for Their