The Weak Form of the Efficient Market Hypothesis States That

question 51

Multiple Choice

The weak form of the efficient market hypothesis states that

• A) Successive price changes are dependent.
• B) Successive price changes are independent.
• C) Successive price changes are biased.
• D) Successive price changes depend on trading volume.
• E) Properly specified trading rules are of value.

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Definitions:

Time Deposits

A financial product provided by banks that offers a higher interest rate in exchange for keeping a specified amount of money untouched for a predetermined period.

Reserve Requirement

The minimum percentage of customer deposits and notes that a bank must hold as reserves rather than lending out, as mandated by the central bank.

Demand Deposits

Bank accounts from which deposited funds can be withdrawn at any time without any notice to the institution, typically through writing checks.

Excess Reserves

The reserves held by banks in excess of what is required by regulations, which can be loaned out to generate additional income.