The Efficient Market Hypothesis States That

question 17

Multiple Choice

The efficient market hypothesis states that:

• A) Requiring firms to issue more stock will reduce volatility.
• B) Requiring investors to hold securities longer will reduce volatility.
• C) Electing a pro-business Republican president makes the market more efficient.
• D) Taxing security returns will raise prices .
• E) Markets price securities fairly at all times and that new information is rapidly reflected in the price.

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Definitions:

Dominant Values

The core beliefs and principles that are widely accepted and upheld within a society or organization.

Observable Artifacts

The visible elements in an organization's culture, including symbols, physical structures, language, and rituals.

Organization's Culture

The shared values, traditions, norms, customs, and general behavior patterns that define how things are done within an organization.

Ceremonies

Formal events, often ritualistic in nature, conducted by organizations or social groups to commemorate or celebrate specific occasions.