Which of the Following Is NOT an Assumption of Market

question 34

Multiple Choice

Which of the following is NOT an assumption of market efficiency?

• A) Instruments denominated in other currencies are perfect substitutes for one another.
• B) Transaction costs are low or nonexistent.
• C) All relevant information is quickly reflected in both spot and forward exchange markets.
• D) All of the above are true.

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Definitions:

Attention

The mental focus or concentration directed towards a specific object, task, or activity.

Impression Management

The process by which individuals attempt to control the perceptions of other people about themselves, usually by adapting their behavior or appearance.

Role Distancing

A concept that describes when individuals distance themselves from a role they are expected to play to avoid fully identifying with it.

Social Exchange

A theory in social science that posits human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.