The Theory of Efficient Markets Assumes That

question 45

Multiple Choice

The theory of efficient markets assumes that:

• A) prices of bonds, but not stocks, reflect all available information.
• B) the prices of all financial instruments reflect all available information.
• C) stock prices are relatively rigid because it takes a while for information to efficiently move through the market.
• D) the best approach to determining stock prices is to follow the chartists.

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Definitions:

Chinese Immigrants

People hailing from China who move to another country, historically significant for their roles in the labor force during the development of the American West in the 19th century.

Dawes Act

An 1887 law that aimed to assimilate Native Americans into American society by distributing reservation land to individual owners.

Treaty System

A framework or set of principles that governs the making and enforcement of treaties between sovereign states, including agreements on trade, peace, and alliances.

Elk v. Wilkins

A landmark U.S. Supreme Court case in 1884 that held that Native Americans who voluntarily quit their tribes did not automatically gain U.S. citizenship.