According to the Efficient Markets Hypothesis

question 106

Multiple Choice

According to the efficient markets hypothesis

• A) common stock prices should be constant.
• B) the price of a corporation's stock is likely to fluctuate substantially in response to news about changes in the company's short-term prospects.
• C) the price of a corporation's stock will fluctuate significantly only in response to news about changes in the company's long-term prospects.
• D) price fluctuations in common stock are a response to fads and are only infrequently the result of changes in the expected profitability of the companies involved.

---

Definitions:

Adaptive Value

The contribution of a trait or behavior to the survival and reproductive success of an organism.

Emotional Evolution

The process of how emotional responses and expressions have developed and changed over time in living organisms.

Evolved Emotions

Emotions that have developed over time as adaptations to help organisms respond to environmental challenges and opportunities.

Primary Emotions

Fundamental emotions that are universally experienced by humans across cultures, such as happiness, sadness, fear, disgust, surprise, and anger.