All three must be incorporated. The absence of each has been used to criticize research on the EMH. Some studies used information that was not available to investors at the time the historical data was evaluated. Many studies did not explicitly account for transaction costs, even though these would clearly reduce profits. Finally, risk adjustments must be made. As an example, consider a trading strategy that looks at percentage price breakouts as described in the text. Large percentage price breakouts are more likely to be found in lower-priced stocks. Many of these are riskier, smaller firms, so a test like this would be biased toward riskier stocks and should require a higher return just to match the market.

Linear combination of two normal distributions is also a normal distribution. Its mean = 2 x
1 0% + 3 x 15% = 65%.

Low apartment prices give landlords little incentive to maintain quality, and likewise, apartment will become even scarcer as demand increases. Any time there is a shortage, consumers will
"pay" a higher price in terms of time searching. While some of the poor are likely to benefit from rent control, anyone who gets such an apartment gains, and some of those people may not be poor.
Additionally, if there is "key money" or other bribery, other parties such as apartment owners may gain.

A common multivariate distribution is the multivariate normal distribution, which is a
'combination' of a number of univariate normal random variables. It is important to note that when each individual random variable is normally distributed, the multivariate distribution that comprises these individual random variables is normal as well.