According to the Efficient Markets Hypothesis

question 66

Multiple Choice

According to the efficient markets hypothesis,

• A)the equilibrium price of an asset equals the optimal forecast of fundamental value based on available information.
• B)the actual and expected prices of an asset will be equal.
• C)the actual price of an asset reflects only information on past returns on the asset.
• D)the expected price of an asset incorporates only information on past returns on the asset.

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Definitions:

Asymmetric Carbons

Carbon atoms bonded to four different groups, leading to molecules that can exist in two non-superimposable mirror image forms.

Trichloroheptane

A compound consisting of a seven-carbon chain heptane with three chlorine atoms attached, existing in several isomeric forms.

Diastereomers

Stereoisomers that are not mirror images of each other, differing in the spatial arrangement of atoms.

Enantiomers

Compounds that are non-superimposable mirror images of one another, often involved in chirality in organic chemistry.