The Efficient Markets Hypothesis States That

question 46

Multiple Choice

The efficient markets hypothesis states that:

• A) the price of assets already reflects all publicly available information.
• B) arbitrage is impossible in financial markets.
• C) in financial markets both buyers and sellers will be equally informed.
• D) financial markets are, on average, more efficient than product markets.

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Definitions:

AASB 11

An Australian accounting standard that addresses the accounting for interests in joint arrangements, specifying how an entity should report its interests.

Joint Arrangement

A contractual arrangement in which the parties involved have joint control over the decision making in relation to the joint arrangement.

Joint Control

A situation in an arrangement where two or more parties have agreed to share control over the strategic financial and operating decisions of an activity.

Operating Policies

The rules or guidelines that govern the daily functioning and decision-making processes within an organization.