Which of the Following Statements About Market Efficiency Is True

question 17

Multiple Choice

Which of the following statements about market efficiency is true?

• A)A market can be semi-strong-form and strong-form efficient but not weak-form efficient.
• B)A market can be semi-strong-form efficient but not weak-form efficient.
• C)A market can be semi-strong-form,weak-form or strong-form efficient but not all simultaneously.
• D)A market must be weak-form efficient if it is semi-strong-form efficient.

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Definitions:

Inductive Method

A reasoning method where several assumptions, considered true or mostly true, are merged to derive a particular outcome.

Hawthorne Effect

A phenomenon in which individuals modify an aspect of their behavior in response to their awareness of being observed.

Observational Effect

The impact that observation can have on the behavior of subjects being studied, often related to the phenomenon of subjects altering their behavior because they are aware they are being observed.

Valid

Relates to something that is logically sound, well-founded, or produces desired results; often used in the context of arguments or research findings.