If It Proves Possible to Make Abnormal Profits Based on Information

question 15

Multiple Choice

If it proves possible to make abnormal profits based on information regarding past stock prices, then the market:

• A)Is weak-form efficient
• B)Is not weak-form efficient
• C)Is semi-strong-form efficient
• D)Is strong-form efficient

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Definitions:

Public Markets

Public markets are venues where securities, commodities, and other financial instruments are traded between investors openly and regulated by financial authorities.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Issued Shares

The total number of shares that a corporation has legally sold to shareholders, including those held by the corporation itself as treasury shares.

Stockholders

Individuals or entities that own shares in a corporation, granting them rights to dividends and a stake in the corporate assets and earnings.