In Order to Test the Strong Form of Market Efficiency

question 6

Multiple Choice

In order to test the strong form of market efficiency, researchers have:
I. examined the recommendations of professional security analysts
II. performance of mutual funds
III. performance of pension funds

• A) I only
• B) I and II only
• C) I, II, and III only
• D) II and III only

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Definitions:

Lessen Dissonance

The act of reducing conflict or inconsistency, especially in the context of cognitive dissonance in psychology, where individuals strive for internal consistency between their beliefs and actions.

Frequent-Flyer Miles

Loyalty program points awarded by airlines to passengers who travel with them, which can be redeemed for flight discounts, upgrades, or other rewards.

Noncompensatory Decision

A decision-making process in which options are evaluated in a way that one attribute cannot make up for a disadvantage in another.

Compensatory Decision

A decision-making process where the consumer evaluates the positive and negative attributes of each alternative and makes a trade-off to arrive at a decision.