Which Statement Regarding the Efficient Markets Hypothesis Is True

question 1

Multiple Choice

Which statement regarding the efficient markets hypothesis is true?

• A)If the stock market is weak-form efficient, then one cannot outperform the market even if he or she has private information.
• B)If the stock market is semistrong-form efficient, then the expected return on stocks and bonds must be the same.
• C)If the stock market is strong-form efficient, then high beta stocks must have the same expected return as low beta stocks.
• D)Even though the efficient markets hypothesis (EMH) assumes that markets behave as if all investors were rational, under the EMH it is still possible to have some irrational investors in a rational market.

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Definitions:

Ventral Medial Geniculate Nucleus

The ventral medial geniculate nucleus is a part of the auditory thalamus involved in the processing and relaying of auditory information from the ears to the auditory cortex of the brain.

Inputs

Signals or data received by a system, which are then processed to generate an output.

Inner Hair Cells

Inner hair cells are the sensory cells located in the cochlea of the inner ear, playing a critical role in sound transduction by converting mechanical sound vibrations into electrical signals to the brain.

Human Cochlea

A spiral-shaped, fluid-filled inner ear structure, essential for converting sound wave vibrations into electrical signals for the brain.