The Weak Form of the Efficient Market Theory Contends That

question 115

Multiple Choice

The weak form of the efficient market theory contends that

• A)past price performance is useless in predicting future price movements.
• B)past performance can help determine the general direction of future price movements.
• C)any publicly available information is useless in predicting future price movements.
• D)price movements are not random but follow a general trend over a period of time.

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Definitions:

Average Total Cost Curve

A graphical representation showing how the total cost of production per unit of output changes with the level of output.

Long-run Equilibrium

occurs when all firms in a market or industry are producing at their most efficient level, with no incentive for entry or exit, and economic forces are balanced.

Total Revenue

The total amount of money a firm receives from selling its goods or services, calculated as the unit price multiplied by the quantity sold.

Increasing-cost Industry

An industry in which the cost of production increases as the industry's output expands, often due to resource limitations or rising input prices.