The Efficient Market Hypothesis Deals Primarily with

question 27

Multiple Choice

The efficient market hypothesis deals primarily with

• A) random speculation in securities.
• B) the degree to which prices adjust to new information.
• C) the degrees to which price movements are the result of past trends.
• D) how an investor can significantly outperform the market in general.

---

Definitions:

Direct Method

A way to present the cash flow statement, showing actual cash flows from operating activities instead of adjusting net income for accruals.

Operating Activities

The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.

Statement Of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Non-Current Assets

Assets that are expected not to be converted into cash within a year and are long-term resources of a company, such as property, plant, and equipment.