In Tests of the Semistrong-Form Efficient Market Hypothesis,an Adjustment for Market

question 77

Multiple Choice

In tests of the semistrong-form efficient market hypothesis,an adjustment for market effects is carried out by

• A) Calculating the historical return.
• B) Calculating the market rate of return.
• C) Calculating the abnormal rate of return.
• D) Calculating the cross-sectional return.
• E) None of the above.

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Definitions:

Table

A systematic arrangement of data in rows and columns, facilitating easy comparison, analysis, and presentation of information.

Slope Coefficient

A measure in regression analysis that quantifies the change in the dependent variable for a one-unit change in an independent variable.

Correlation Coefficient

A measure ranging from -1 to 1 that indicates the strength and direction of the relationship between two variables.

Slope

In mathematics, the slope defines the steepness and direction of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.