The Concept of Market Efficiency Embodies the Idea That

question 13

Multiple Choice

The concept of market efficiency embodies the idea that:

• A)investors want to be compensated with higher returns for all the unsystematic risk they bear,and expect prices to adjust in an instantaneous and unbiased way.
• B)all investors are fully informed about the potential returns for a given firm,and therefore the share price is a fair representation.
• C)share prices respond to new information in a way that is both unbiased and instantaneous.
• D)because holders of debt do not share in the high returns in good economic periods,they require a higher rate of return relative to the risk they bear.

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Definitions:

Extravasation

Refers to the leakage of a fluid, often blood or drug solutions, from a vessel into the tissues surrounding it.

Hemochromatosis

A genetic disorder causing the body to absorb too much iron from the diet, leading to excess iron deposits in organs.

Leukocytes (WBC)

White blood cells that are part of the immune system, protecting the body against both infectious disease and foreign invaders.

Fibrinogen

A soluble plasma glycoprotein that is converted by thrombin into fibrin during blood clot formation.