According to the Semi-Strong Form Efficient: ____________

question 34

Multiple Choice

According to the semi-strong form efficient: ____________.

• A)stock prices do not rapidly adjust to new information
• B)future changes in stock prices cannot be predicted from any information that is publicly available
• C)corporate insiders should have no better investment performance than other investors even if allowed to trade freely
• D)arbitrage between futures and cash markets should not produce extraordinary profits

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Definitions:

Perfectly Competitive

An economic market scenario where buyers and sellers operate in a setting with full information, resulting in efficient allocation of resources.

Economic Profit

The profit a business makes after deducting both its explicit and implicit costs, not just its operational expenses.

Profit Maximizing

A process by which a firm determines the price and output level that returns the greatest profit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or loan payments.