The Efficient Market Hypothesis Holds That That Financial Markets Price

question 3

Multiple Choice

The efficient market hypothesis holds that that financial markets price assets at their intrinsic worth, given all available information. Which of the following forms of the efficient market hypothesis defines all available information as knowledge of past security prices?

• A) Weak
• B) Semi-weak
• C) Semi-strong
• D) Strong

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Definitions:

Real Wages

The purchasing power of wages, adjusted for inflation, indicating the quantity of goods and services that can be bought with a unit of labor.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Real Wages

Wages or salaries that have been adjusted for inflation, indicating the purchasing power of the income received by workers.

CPI

The Consumer Price Index is an indicator that calculates the weighted average price of a selection of consumer goods and services, including food, medical care, and transportation.