According to the Efficient Markets Hypothesis, Stock Price Changes Reflect

question 97

Multiple Choice

According to the efficient markets hypothesis, stock price changes reflect ______, but according to Keynes, stock price changes often reflect ______.

• A) the inventory accelerator; changes in Tobin's q
• B) changes in the real cost of capital; financing constraints
• C) changes in the underlying economic fundamentals; irrational waves of optimism or pessimism
• D) reductions in investment tax credits; the use of historical cost rather than replacement cost in computing depreciation costs

Compute test statistics for hypothesis testing.

Set up and interpret rejection regions in hypothesis testing.

Understand and compute confidence intervals and their relation to hypothesis tests.

Understand the impact of sample size and standard deviation on test results.

---

Definitions:

Clayton Act

A United States antitrust law enacted in 1914, aimed at promoting competition by preventing unfair business practices such as price discrimination and exclusive dealings.

Sherman Act

A landmark federal statute in the field of U.S. antitrust law aimed at prohibiting monopolistic practices and promoting competition.

Clayton Act

A U.S. antitrust law, passed in 1914, aimed at protecting trade and commerce against unlawful restraint and monopolies.

Fraudulent Advertising

The use of false, misleading, or unproven information to advertise products to consumers.