Which of the Following Is True of the Efficient Markets

question 14

Multiple Choice

Which of the following is true of the efficient markets hypothesis?

• A)The efficient markets hypothesis summarizes the idea of efficient markets as markets in which prices fully reflect available information.
• B)The efficient markets hypothesis summarizes the idea of efficient markets as markets in which both systematic and unsystematic risk can be completely eliminated.
• C)The efficient markets hypothesis only applies to large multinational corporations which have both systematic and unsystematic risk.
• D)The efficient markets hypothesis states that the expected return of a financial asset is a linear function of various macro-economic factors.

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Definitions:

Fourteen Points

A statement of principles for peace that was to be used for peace negotiations in order to end World War I, proposed by U.S. President Woodrow Wilson.

Woodrow Wilson

The 28th President of the United States (1913-1921) known for leading the country during World War I and advocating for the League of Nations.

Peace

A state or period in which there is no war or any other kind of conflict, often associated with tranquility, harmony, and the absence of hostility.

Germany

A country in Central Europe, known for its influential history in science, arts, and the pivotal roles it played in both World War I and World War II.