The "Strong" Form of the Efficient Market Hypothesis States That

question 88

Multiple Choice

The "strong" form of the efficient market hypothesis states that

• A) past price data is positively correlated to future prices.
• B) prices reflect all public information.
• C) all information both public and private is immediately reflected in stock prices.
• D) none of these options are correct.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to analyze the profitability of an investment or project.

Net Present Value

A calculation used in finance that measures the profitability of an investment by summing the present values of its cash flows minus initial investment.

Initial Investment

The initial amount of money put into a project or venture to start its operations.

Required Return

Required return is the minimum expected return an investor seeks for an investment, considering its risk level.