According to the Efficient Market Hypothesis,financial Markets Fluctuate Daily Because

question 45

Multiple Choice

According to the efficient market hypothesis,financial markets fluctuate daily because they:

• A) are inefficient.
• B) slowly react to new information.
• C) are continually reacting to new information.
• D) offer tremendous arbitrage opportunities.
• E) only reflect historical information.

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Definitions:

Positive Punishment

In operant conditioning, a method that involves adding an unfavorable outcome or event following an undesired behavior, intended to decrease the likelihood of the behavior recurring.

Law of Effect

A principle of behavior that states responses followed by satisfaction will become more likely to occur, while those followed by dissatisfaction will become less likely.

Fear

An emotional response to a perceived threat, which serves as a basic survival mechanism by triggering the fight or flight response.

Generalization

The process by which the brain applies learned information from specific instances to similar situations or stimuli.