Your Broker Suggests That You Can Make Consistent,excess Profits by Purchasing

question 31

Multiple Choice

Your broker suggests that you can make consistent,excess profits by purchasing stocks on the 20^th of the month and selling them on the last day of the month.If this is true,then:

• A) the market is only semi strong-form efficient.
• B) the market violates even weak-form efficiency.
• C) insiders will be the only investors to profit.
• D) prices follow a random walk.

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Definitions:

Government Spending

The total expenditure by the government on goods and services, including salaries of public servants, public investments, and social services.

Tax Increases

A rise in the rate of taxes imposed by governments on individuals or businesses.

Inflationary Gap

A situation where the total demand for goods and services exceeds the total supply at current prices, leading to upward pressure on prices and inflation.

Full Employment GDP

The level of gross domestic product achieved when the economy is fully employing all available labor and resources, maximizing output.