Which of the Following Statements Is Correct

question 55

Multiple Choice

Which of the following statements is correct?

• A)If the market is strong-form efficient it must also be weak-form efficient and semi-strong efficient.
• B)There is evidence to suggest that the market is strong-form efficient because corporate insiders have made extraordinary profits by trading on inside information.
• C)The Efficient Market Hypothesis states that security prices will be based on their expected return.
• D)None of these statements is correct.

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Definitions:

Backed by Gold

Refers to a currency that is guaranteed by gold reserves, meaning its value is supported by the amount of gold held by the issuing authority.

Paper Currency

Money in the form of paper notes issued by the government or central bank, representing a legal tender for transactions.

Medium of Exchange

A medium of exchange is a system or object that is widely accepted as payment for goods and services.

Transaction Costs

The expenses incurred when buying or selling goods or services, including costs of gathering information, negotiating, and enforcing contracts.