With Strong-Form Market Efficiency

question 28

Multiple Choice

With strong-form market efficiency:

• A) the price of a security in the market reflects all public information only.
• B) it would not be possible to earn abnormally high returns by trading on private information.
• C) investors who have access to inside or private information will be able to earn abnormal returns.
• D) None of the above.

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Definitions:

Regression

A statistical method used to model and analyze the relationships between dependent and independent variables to predict outcomes.

Regression Coefficient

A value that represents the amount by which a dependent variable changes when a related independent variable changes by one unit.

Regression

A statistical method used to determine the relationship between a dependent variable and one or more independent variables.

Variance

Average squared deviation from the mean.