Which of the Following Is NOT True About the Efficient

question 2

Multiple Choice

Which of the following is NOT true about the efficient market hypothesis?

• A)Market prices reflect all available information at any given time.
• B)Market prices do not fluctuate dramatically.
• C)Market prices are considered fair.
• D)Investors cannot continuously earn an excess return over and above the risk-adjusted return.

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates, usually the local currency or the currency of the country where it primarily generates and expends cash.

Fair Value

The proceeds from selling an asset or the financial burden of a liability transfer in a civilized negotiation with market participants on the valuation date.

Functional Currency

The main currency used by a business or in an economy, often the domestic currency or the currency of the primary economic environment in which the entity operates.

Foreign Currency

Refers to currencies other than the domestic currency of a company, used in international trade and investment.