The "Strong" Form of the Efficient Market Hypothesis States That

question 21

Multiple Choice

The "strong" form of the efficient market hypothesis states that

• A)past price data is positively correlated to future prices.
• B)prices reflect all public information.
• C)all information both public and private is immediately reflected in stock prices.
• D)None of these options

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Definitions:

Small Businesses

Enterprises characterized by a small number of employees, limited revenue, and size within their industry.

Internal Rate of Return (IRR)

A financial metric used to estimate the profitability of potential investments.

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and attract funds.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.