The _____ Suggests That Given Relatively Efficient Markets,the Price of a "Basket

question 22

Multiple Choice

The _____ suggests that given relatively efficient markets,the price of a "basket of goods" should be roughly equivalent in each country.

• A)theory of efficient markets
• B)law of one price
• C)theory of price inflation
• D)PPP theory

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Definitions:

Probability

The measure of likelihood that an event will occur, expressed as a number between 0 and 1.

Random Variable

A variable whose values depend on outcomes of a random phenomenon. It can be discrete or continuous.

Standard Deviation

A metric that quantifies the spread or variation of a dataset in comparison to its average value.

Normal Model

A probability distribution that is symmetrical around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.