The Efficient Market Hypothesis Has Several Forms

question 79

Multiple Choice

The efficient market hypothesis has several forms.The weak form states that:

• A) past price data is unrelated to future prices.
• B) prices reflect all public information.
• C) all information both public and private is immediately reflected in stock prices.
• D) market efficiency is weakest during an economic downturn.

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Definitions:

Sequential Game

A type of game in game theory where players make decisions one after another, with later players having some knowledge of earlier actions.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged.

Extensive Form

This term refers to a representation of a game that shows the sequence of moves, and the outcomes of those moves, emphasizing the temporal aspect of decision-making in the game.

Market Entry

The act of introducing new products or services into an existing market, often faced with barriers that must be overcome.