The Efficient Market Hypothesis Has Several Forms

question 97

Multiple Choice

The efficient market hypothesis has several forms. The weak form states that

• A) past price data is unrelated to future prices.
• B) prices reflect all public information.
• C) all information both public and private is immediately reflected in stock prices.
• D) none of these options are true.

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Definitions:

Fair Values

An estimation of the market value of an asset or liability, based on current prices in an active market or through model-based techniques when no active market exists.

Journal Entry

A record of a business transaction in an accounting system that includes the accounts and amounts to be debited and credited.

Acquisition

The process of acquiring control of another company or business asset, which can involve a purchase, merger, or take-over.

Assets

Resources owned or controlled by a person or company, expected to produce economic value or future benefits.