The Efficient Market Hypothesis Assumes That

question 13

Multiple Choice

The efficient market hypothesis assumes that

• A)there are only a few buyers and sellers in a stock market and stocks are illiquid.
• B)there are many buyers and sellers in a stock market and stocks are illiquid.
• C)there are only a few buyers and sellers in a stock market and stocks are liquid.
• D)there are many buyers and sellers in a stock market and stocks are liquid.

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Definitions:

Polarization Effect

A process whereby a group's viewpoints become more extreme as the members discuss and reinforce one another's attitudes, often leading to a more pronounced division.

Recency Effect

The tendency to evaluate others in terms of the most recent impression.

Social Influence

The area of social psychology that studies the ways in which people influence the thoughts, feelings, and behavior of others.

Pressure to Conform

The social influence that encourages individuals to align their behavior or beliefs with those of a group.