The Theory of Efficient Markets Suggests That ________

question 167

Multiple Choice

The theory of efficient markets suggests that ________.

• A) interest rates and inflation rates are inversely related
• B) systemically important financial institutions are more likely to fail
• C) all movements in stock markets are based on rational appraisals of new information
• D) long-term investments by banks are more profitable than short-term investments

---

Definitions:

Hair Follicle Receptors

Sensory nerve fibers that surround each hair follicle and are sensitive to the movement of the hair, providing tactile feedback.

Mechanoreceptors

Sensory receptors that respond to mechanical pressure or distortion, involved in detecting touch, pressure, sound, and proprioception.

Brainstem

The brainstem is the structure located at the base of the brain that connects the cerebrum with the spinal cord, and is responsible for controlling vital life functions such as breathing, heart rate, and blood pressure.

Optic Nerve

The cranial nerve that transmits visual information from the retina to the brain.