The Stronger Version of the Efficient Markets Hypothesis States That

question 59

Multiple Choice

The stronger version of the efficient markets hypothesis states that

• A)the prices of all financial instruments reflect only the optimal forecast of the financial instrument.
• B)the prices of all financial instruments reflect not only the optimal forecast of the financial instrument but also the true fundamental value of the instrument.
• C)many factors have a direct effect on future income streams of the financial instruments.
• D)many factors have a direct effect on value of the assets and the expected income systems of those assets on which the financial instruments represent claims.

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