The Strong Form of the Efficient Market Hypothesis Suggests

question 36

Multiple Choice

The strong form of the efficient market hypothesis suggests
1. inside information will not lead to superior investment results
2. inside information will lead to superior investment results
3. studying financial statements will not lead to superior investment results
4. studying financial statements will lead to superior investment results

• A)1 and 3
• B)1 and 4
• C)2 and 3
• D)2 and 4

---

Definitions:

Stock's Price

The current price at which a share of stock can be bought or sold in the market.

Call Option's Delta

A measure of how much the price of a call option is expected to change based on a one unit change in the price of the underlying asset.

Black-Scholes OPM

A model used to estimate the price of European-style options, leveraging factors such as underlying asset price, strike price, volatility, and time to expiration.

Instantaneous Risk-free Rate

The theoretical rate of return of an investment with zero risk at any given moment, used in certain financial models.