Assume That Markets Are Semistrong-Form Efficient

question 91

Multiple Choice

Assume that markets are semistrong-form efficient. Which of the following statements is most correct?

• A) All stocks should have the same expected return.
• B) All stocks should have the same realized return.
• C) Past stock prices can be successfully used to forecast future stock returns.
• D) Answers a and c are correct.
• E) None of the answers above is correct.

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Definitions:

Leisure

Leisure refers to the time available to an individual when not engaged in work, when one can relax, engage in recreational activities or hobbies.

Nonlabor Income

Income received from sources other than direct employment or labor, such as investments, retirement pensions, or social security benefits.

Wage Rate

The standard amount of compensation given for the performance of specific services, typically expressed per hour, day, or other periods of work time.

Budget Equation

An equation that represents the relationship between income, savings, and expenses.