An investor who picks a portfolio by throwing darts at the financial pages:
A)believes that riskier portfolios earn the same as less risky portfolios.
B)believes that efficient markets will protect the portfolio from harm as all information is priced.
C)does so because stock prices do not matter; only cash flow generated matters.
D)Both A and C.
E)Both B and C.

Question

Quizplus · Accepted Answer

The investor believes in the efficient market hypothesis, which suggests that all available information is already reflected in stock prices, thus protecting the portfolio from harm.

An Investor Who Picks a Portfolio by Throwing Darts at the Financial