A Weak-Form Efficient Market Can Best Be Described as a Market

question 3

Multiple Choice

A weak-form efficient market can best be described as a market in which:

• A)trading strategies based upon past share prices cannot earn abnormal profits.
• B)all publicly available information is fully reflected in share prices.
• C)share prices follow predictable trends.
• D)trading strategies based on past information can earn abnormal profits.

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Definitions:

Compounded Quarterly

A method where interest is calculated and added to the principal balance four times a year, affecting the total interest accrued over time.

Promissory Note

An economic tool comprising a formal pledge by one party to give a specific amount of money to another, redeemable upon request or at a predetermined time.

Discounted

Refers to the reduction of an item's price or the present value of future cash flows discounted back to the present value.

Proceeds

The amount of money brought in from a transaction or sale, before any expenses are deducted.