The Strong-Form Efficient Market Implies That

question 19

Multiple Choice

The strong-form efficient market implies that:

• A) every investor can consistently beat the market after adjusting for risk differences
• B) stock prices reflect all public and private knowledge
• C) corporate officers and insiders can earn above-average, risk-adjusted profits
• D) all future returns can be predicted for investments if the beta is known

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Definitions:

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation.

Regressive Tax

A tax system wherein the tax rate decreases as the taxable amount increases, placing a higher burden on lower-income earners.

Sales Tax

A tax on the value of goods sold.

Wealth Tax

A tax on the wealth of an individual.