Based on the Semi- Strong Form of the Efficient Markets

question 33

Multiple Choice

Based on the semi- strong form of the efficient markets theory, an investor reacting immediately to a news flash on the television generally

• A) will suffer a loss.
• B) is too late to make an exceptional profit.
• C) is guaranteed to make a reasonable profit.
• D) can make an abnormal profit.

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Definitions:

Marginal Cost

The increase in costs resulting from the manufacturing of one extra good or service.

Dominant Price Leader

A firm that has the largest market share within an industry and whose pricing decisions are often followed by other firms in the market.

Monopolist

An entity, individual, or company that is the sole supplier of a particular commodity or service in a market, often resulting in the power to control prices and market conditions.

Market Demand

The aggregate amount of a product or service that every customer in a market is prepared and able to buy at different price levels.