WEEK 6 - EFFICIENT MARKET HYPOTHESIS

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6 Questions

Insider Trading is not possible in a market that is _______________

Strong Form Efficient

Technical analysis should never work in a market that is _____

All the Above

Which one of the following statements is correct?

The information set of past prices is a subset of the information set of publicly available information.

Aerotech, an aerospace technology research firm, announced at 11:00 am this morning that it hired the world’s most knowledgeable and prolific space researchers yesterday. Before today Aerotech’s stock had been selling for $100. Assume that no other information is received over the next week and the stock market as a whole does not move. Consider the following scenarios, which one indicates strong-form market efficiency.

The stock price jumps to $120 just when the stock market open at 9:30 am

If the market is in strong form efficient, which one of the following statements is correct?

All about are correct

A stock market is 'efficient' if

Share prices respond rapidly and appropriately to new information

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