If the Financial Markets Were Regulated Such That the Markets

question 1

Multiple Choice

If the financial markets were regulated such that the markets maintained strong form efficiency, then:

• A)insider trading laws would be unnecessary.
• B)all investors would earn equivalent rates of return.
• C)risk premiums would vanish.
• D)all investors would become arbitrage traders.
• E)securities would tend to be continually underpriced.

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Definitions:

Debris Flows

Rapid movements of water-laden masses of loose mud, sand, soil, rock, and debris down slopes.

Talus Slopes

Accumulations of broken rock fragments at the base of cliffs, steep slopes, or valley shoulders.

Slopes Fail

Instances where a slope collapses or slides due to gravitational pull and other factors like water saturation or seismic activity.

Rock Slide

A slab of relatively intact rock that detaches from bedrock and slides downhill, shattering as it moves.