In Order to Confirm the Weak-Form Efficient Market Hypothesis,an Examination

question 64

Multiple Choice

In order to confirm the weak-form efficient market hypothesis,an examination of stock price runs over time would reveal that stock price changes over time were

• A) Highly positively correlated.
• B) Moderately positively correlated.
• C) Highly negatively correlated.
• D) Moderately negatively correlated.
• E) None of the above.

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Definitions:

Stock Index

A statistical measure that reflects the composite value of a basket of stocks, representing a particular market or a segment of it.

Risk-Free Rate

The theoretical return on investment with zero risk, often represented by the yield on government bonds.

Anticipated Dividend

The forecasted distribution of earnings to shareholders indicated by a company's management.

Futures Contract

A formal agreement, set by law, to purchase or sell an item at an agreed price on a certain date in the future.