According to the Efficient Market Hypothesis

question 6

Multiple Choice

According to the efficient market hypothesis

• A)changes in the prices of stocks are predictable.Evidence shows that managed funds typically do better than indexed funds.
• B)changes in the prices of stocks are predictable.Evidence shows that indexed funds typically do better than managed funds.
• C)changes in the prices of stocks are not predictable.Evidence shows that managed funds typically do better than indexed funds.
• D)changes in the prices of stocks are not predictable.Evidence shows that indexed funds typically do better than managed funds.

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Definitions:

Visual Codes

Refers to symbols or images used to represent information or messages in a visual format.

Encoding

The initial learning of information; transforming sensory information into a form that is memorable.

Elaborative Rehearsal

A technique for memory improvement involving the linking of new information to existing memories and knowledge through semantic processing.

Tactile Imagery

Descriptive language that pertains to the sense of touch, creating a sensory experience where the reader or listener can “feel” textures, surfaces, or physical sensations described in the text.