According to the Efficient Markets Hypothesis

question 66

Multiple Choice

According to the efficient markets hypothesis,

• A)the equilibrium price of an asset equals the optimal forecast of fundamental value based on available information.
• B)the actual and expected prices of an asset will be equal.
• C)the actual price of an asset reflects only information on past returns on the asset.
• D)the expected price of an asset incorporates only information on past returns on the asset.

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Definitions:

Between

Referring to a position or space that separates two points, objects, or entities.

Complete

Having all the necessary or appropriate parts; fully carried out; thorough.

Decompensation

A failure of the body's compensatory mechanisms to maintain functional stability, leading to worsening symptoms or the development of disease states.

Prefix

A set of letters that is added to the beginning of a word to change its meaning or create a new word.