After Controlling for Risk, If Someone Were Able to Earn

question 96

Multiple Choice

After controlling for risk, if someone were able to earn greater than the average returns for the market on a consistent basis using publicly available information, which form of market efficiency is violated?

• A) none of forms would be violated
• B) semi-strong
• C) strong
• D) all of the forms of market efficiency would be violated,

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Definitions:

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulating banks, maintaining financial stability, and providing financial services.

FDIC

The Federal Deposit Insurance Corporation, an independent agency of the United States government that insures deposits at banks and thrift institutions.

Insures Deposits

A guarantee provided by government or private entities that deposits in banks are protected up to a certain limit in the event of a bank failure.

Commercial Banks

Commercial Banks are financial institutions that accept deposits, offer various banking services like loans and mortgages, and play a significant role in the financial system.