Which Statement Describes a Serious Challenge to the Efficient Markets

question 1

Multiple Choice

Which statement describes a serious challenge to the efficient markets hypothesis?

• A) Stock prices fluctuate more than can be explained by news about fundamentals.
• B) Individual investors behave in systematically irrational ways.
• C) Stock prices follow a random walk.
• D) Stock prices fluctuate more than can be explained by news about fundamentals, and individual investors behave in systematically irrational ways.

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Definitions:

Marxist

Pertains to the theories and methodologies derived from the works of Karl Marx, focusing on class struggle, economic analysis, and societal change.

Weberian

Pertaining to the theories or methodologies of the German sociologist Max Weber, especially in relation to the social and economic organization of society.

Functionalist

A functionalist is a social theorist who focuses on the role that societal structures and institutions play in maintaining social stability and order.

Social Stratification

The arrangement of individuals into hierarchical layers based on wealth, power, prestige, or other valued resources within a society.