The Efficient Market Hypothesis Requires

question 28

Multiple Choice

The efficient market hypothesis requires
1. financial markets to be competitive
2. prices to adjust rapidly
3. prices of undervalued securities to fall

• A)1 and 2
• B)1 and 3
• C)2 and 3
• D)all of the above

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Definitions:

Upper Two Quintiles

Refers to the top 40% of the income distribution in a given population.

Income

The financial gain or revenue received by an individual or entity, typically measured on a yearly basis.

Non-Cash Benefits

Compensation provided to employees or individuals in forms other than cash, such as health insurance, pension contributions, or housing.

Poverty Rate

The percentage of the population that lives below the nation's official poverty line, reflecting the proportion of individuals living in poverty.