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Tako Pictures Inc.'s stock finished trading at a price of $42.01 for the day. The market price had varied from $41.93 to $42.10 throughout the
Tako Pictures Inc.'s stock finished trading at a price of $42.01 for the day. The market price had varied from $41.93 to $42.10 throughout the day as buy and sell orders came in. It would be reasonable to consider the price of $42.01 per share as the firm's for the day. Use the following information to determine which of the following statements is most accurate. Nazim is a stock analyst who is looking to invest in small companies that will ideally become large, successful companies. The types of companies that he is considering have few analysts following them. Nazim can maximize his return by diversifying his investment across all companies in this market segment, because the stock market is a highly efficient market. It would be a waste of time and money to try to pick individual companies that are currently undervalued. Nazim can maximize his return by identifying the companies in this market segment that are potentially undervalued and investing in only them, because he is dealing with a relatively inefficient market
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