Another Way to State the Efficient Market Hypothesis Is That

question 20

Multiple Choice

Another way to state the efficient market hypothesis is that in an efficient market,

• A) unexploited profit opportunities will never exist as market participants, such as arbitrageurs, ensure that they are instantaneously dissipated.
• B) unexploited profit opportunities will not exist for long, as market participants will act quickly to eliminate them.
• C) every financial market participant must be well informed about securities.
• D) only A and C of the above.

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Definitions:

Inference Forms

Patterns of reasoning where specific statements lead logically to a conclusion.

MP

In logic, MP refers to Modus Ponens, a form of argument that if a conditional statement ('If P then Q') is accepted, and P is affirmed, then Q must also be affirmed.

MT

An abbreviation or shorthand for Modus Tollens, a logical argument form.

Inference Forms

Standard logical structures that outline the relationship between premises and conclusion, guiding the derivation of the latter from the former.