Assume the Securities Markets Are Strong Form Efficient

question 22

Multiple Choice

Assume the securities markets are strong form efficient.Given this assumption, you should expect which one of the following to occur?

• A)The risk premium on any security in that market will be zero.
• B)The price of any one security in that market will remain constant at its current level.
• C)Each security in the market will have an annual rate of return equal to the risk-free rate.
• D)The price of each security in that market will frequently fluctuate.
• E)The prices of each security will fall to zero because the net present value of the investments will be zero.

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Definitions:

Climacteric

A phase of aging that involves physiological and psychological changes, often related to the end of fertility in both men and women, marking the transition to the end of reproductive years.

Perimenopause

The transitional phase before menopause, marked by changes in menstrual cycles and symptoms like hot flashes.

Menopause

The time in a woman's life, usually occurring between 45 and 55 years of age, when menstrual cycles cease permanently due to the decline of ovarian function.

Reflexes

Involuntary and nearly instantaneous movements in response to a stimulus.