Which of the Following Statements Best Describes the Efficient Markets

question 29

Multiple Choice

Which of the following statements best describes the efficient markets hypothesis?

• A) The Efficient Markets Hypothesis suggests that the market does not price stocks fairly; hence, managers should make decisions based on the premise that firms' stocks are undervalued or overvalued.
• B) An individual who has information about past stock prices would be able to profit from this information if weak-form market efficiency exists.
• C) For the Efficient Markets Hypothesis to hold true, every individual investor must be "rational."
• D) Semistrong-form market efficiency means that stock prices reflect all public, but not necessarily all private, information.

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Definitions:

Zygote

The initial cell formed when a sperm cell and an egg cell merge at conception, representing the earliest stage of human development.

Embryo

An embryo is an early stage of development in multicellular organisms, in humans, it specifically refers to the period from fertilization until the end of the eighth week of gestation.

Germinal

Pertains to the earliest stage of development in both plants and animals; in human embryology, it refers to the first two weeks of prenatal development.

Miscarriages

The spontaneous loss of a pregnancy before the 20th week, often due to natural causes related to fetal or maternal health issues.