One Misconception About Market Efficiency Is That

question 8

Multiple Choice

One misconception about market efficiency is that:

• A) inefficiency implies price volatility
• B) prices are set in a varying manner
• C) expected returns imply actual returns
• D) new information is unpredictable

---

Definitions:

Mood-Dependent Memory

The phenomenon where an individual's current mood or affective state can affect the recall of memories that are congruent with that mood.

Short-Term Memory Loss

A condition where an individual has difficulty retaining recent information, often lasting from a few seconds to a minute.

Levels Of Processing Theory

Levels of processing theory proposes that the depth (shallow to deep) of mental processing affects how well information is remembered, with deeper processing leading to better memory.

Exam

A formal test of a person's knowledge or proficiency in a subject or skill.