What Does the Efficient Markets Hypothesis Tell Us About the Movement

question 175

Multiple Choice

What does the efficient markets hypothesis tell us about the movement in a stock price?

• A) It tells what happens to the stock price in the past but not in the future.
• B) It reflects only what the buyers, not the sellers, think about the future movement of the stock price.
• C) It reflects all public information that leads to its movement.
• D) It always predicts how the stock price will move in the future.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and is authorized to act as a single entity.

Officer

typically refers to a person holding a position of authority within an organization, especially within the military or law enforcement, but also in corporate and governmental contexts.

Proxy Materials

Documents that are distributed to shareholders in preparation for shareholders' meetings, usually including information necessary for making informed votes on corporate matters.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights and interests in the company.