When Market Is in the Semi-Strong Form of Market Efficiency

question 4

Multiple Choice

When market is in the semi-strong form of market efficiency:

• A) investors would be able to earn abnormal returns by using publicly available information.
• B) a security's price at a particular time fully reflects the information contained in its sequence of past prices.
• C) investors would be able to earn abnormal returns by trading on private information.
• D) a security's price at a particular time fully reflects both publicly and not publicly available information.

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Definitions:

Disposable Income

The amount of money an individual or household has to spend or save after income taxes have been deducted.

Gross Monthly Income

The gross amount of earnings received in a month prior to any deductions or taxes being subtracted.

Living Expenses

costs associated with day-to-day life, such as housing, food, and transportation.

Percent Rate

The percentage that indicates the rate at which a certain value, such as interest, increases or decreases.