In Order to Test the Weak Form of the Efficient-Market

question 25

Multiple Choice

In order to test the weak form of the efficient-market hypothesis, researchers have used the following methods except

• A)estimation of the serial correlation (autocorrelation)for securities and markets.
• B)measurement of the profitability of trading rules used by technical analysts.
• C)measurement of how rapidly security prices adjust to different news items.
• D)All of the options are methods used for testing weak-form market efficiency.

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Definitions:

Capital Gains

The profit earned from the sale of assets or investments that have increased in value over the time they were held.

Dividend Payout

The part of profits paid out to shareholders as dividends.

Earnings Per Share

The portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability on a per-share basis.

Reverse Split

A corporate action where a company reduces the total number of its outstanding shares to increase the share price without changing the company's overall market capitalization.