Which of the Following Statements Best Describes the Efficient Markets

question 8

Multiple Choice

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

• A) If a market is strong-form efficient, this implies that the returns on a firm's bonds and stocks should be identical.
• B) If a market is weak-form efficient, this implies that all public information is rapidly incorporated into market prices.
• C) If your uncle earned a return higher than the overall stock market last year, this is evidence that the stock market is inefficient.
• D) If a market is weak-form efficient, this implies that analyzing its past price history will not enable one to earn an above-normal rate of return on the stock in the future.

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Definitions:

Gender Norms

Societal expectations and behaviors considered appropriate for individuals based on their perceived sex, influencing roles, actions, and self-perceptions.

Benevolent Sexism

A form of sexism that is couched in terms of positive attitudes and actions that ostensibly promote women's well-being but in fact support traditional gender roles and perpetuate gender inequalities.

Hostile Sexism

Antagonistic attitudes towards women, often characterized by an open dislike or prejudice.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.