There Have Been Cases Where People with Inside Information Have

question 7

Multiple Choice

There have been cases where people with inside information have illegally traded in the stock market, earning disproportionately high returns. What does this suggest?

• A)The strong form of efficiency probably does not hold.
• B)The semistrong form of efficiency does not hold.
• C)The efficient market hypothesis is incorrect.
• D)Behavioral finance cannot be used to explain these instances.

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Definitions:

Competencies

Measurable skills, knowledge, abilities, or behaviors that are critical for successful performance in a specific job, role, or activity.

Cultural Differences

Variations in the customs, values, behaviors, and artifacts of different societies or groups, often affecting communication and interaction among them.

Motivation

The inner drive or process that stimulates an individual to act towards achieving a desired goal.

Employees

Individuals hired by an organization to perform specific duties and tasks in exchange for compensation.