Which Statement Best Explains the Semi-Strong Form of the Efficient

question 29

Multiple Choice

Which statement best explains the semi-strong form of the efficient securities market hypothesis?

• A)A market in which the prices of securities traded in that market at all times properly reflect all information that is publicly known about those securities.
• B)A market in which the prices of securities traded in that market reflect all information, whether publicly or privately known.
• C)A market in which the prices of debt securities traded in that market reflect all information that is privately known about those securities.
• D)A market in which the prices of equity securities traded in that market reflect all information that is privately known about those securities.

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Definitions:

Marginal Expenditure Curve

Curve describing the additional cost of purchasing one additional unit of a good.

Factor of Production

An economic resource that is used to produce goods and services, including land, labor, capital, and entrepreneurship.

Average Expenditure Curve

Supply curve representing the price per unit that a firm pays for a good.

Substitution Effect

The change in consumption resulting from a change in price, causing consumers to substitute cheaper goods for more expensive ones.