The Semistrong Efficiency of Market Implies That

question 47

Multiple Choice

The semistrong efficiency of market implies that:

• A)stock prices fully reflect all inside information.
• B)stock prices do not reflect information contained in past trading volume.
• C)stock prices fully reflect all publicly available information.
• D)stock prices fully reflect all information about future price changes.

Describe the characteristics of perfect competition and the behavior of firms within it.

Explain the difference between short-run and long-run profit maximization and loss minimization.

Differentiate between explicit and implicit costs and their role in determining economic profit.

Recognize the conditions under which a firm maximizes profit, minimizes loss, or breaks even, including the role of average total cost (ATC), marginal cost (MC), and marginal revenue (MR).

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Definitions:

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have foreseen or predicted the outcome, often referred to as the "I-knew-it-all-along" effect.

Presidential Election

A formal decision-making process by which a country's citizens select the President, the head of the executive branch of government.

Overconfidence

The tendency to overestimate the accuracy of one’s knowledge and judgments.

Hindsight Bias

The habit of assuming, once an outcome is known, that it was predictable beforehand.