Which of the Following Best Describes the Term 'Weak- Form

question 18

Multiple Choice

Which of the following best describes the term 'weak- form efficiency'?

• A) Share prices fully reflect all information contained in past price movements.
• B) Share prices fully reflect all the relevant, publicly available information.
• C) All relevant information, including that which is privately held, is reflected in the share price.
• D) Share prices fully reflect information available only to certain shareholders.

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Definitions:

Zero NPV

A situation where the net present value (NPV) of an investment is zero, indicating that the investment is expected to break even and not generate any net profit or loss over time.

Operating Leverage

A measure of how sensitive a company's operating income is to changes in its sales volume, indicating the impact of fixed costs on earnings.

Fixed Production Costs

Costs that do not change with the level of production or output, such as rent, salaries, and insurance premiums, which a company must pay regardless of its level of production.

Contribution Margin

The selling price per unit, minus the variable cost per unit, indicating how much a product contributes towards covering fixed costs and generating profit.