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Questions and Answers
What is the meaning of market efficiency as per the Efficient Securities Markets EMH?
What is the meaning of market efficiency as per the Efficient Securities Markets EMH?
- Security prices fully reflect all publicly available information about that security. (correct)
- Security prices fluctuate randomly over time.
- Security prices reflect inside information only.
- Security prices do not reflect historical information.
In which form of market efficiency does the price fully reflect public and private information?
In which form of market efficiency does the price fully reflect public and private information?
- Random form
- Semi-strong form
- Weak form
- Strong form (correct)
What type of investors would not gain abnormal return in an efficient securities market?
What type of investors would not gain abnormal return in an efficient securities market?
- Short-term investors
- Long-term investors
- Naïve investors
- Sophisticated investors (correct)
What is the implication of market efficiency for financial reporting?
What is the implication of market efficiency for financial reporting?
According to the Efficient Securities Markets EMH, what does investing in an efficient market resemble?
According to the Efficient Securities Markets EMH, what does investing in an efficient market resemble?
According to the Efficient Securities Markets EMH, security prices reflect inside information
According to the Efficient Securities Markets EMH, security prices reflect inside information
In a weak form of market efficiency, prices fully reflect historical information
In a weak form of market efficiency, prices fully reflect historical information
Market efficiency implies that investing is a fair game with no bargains
Market efficiency implies that investing is a fair game with no bargains
In a semi-strong form of market efficiency, price fully reflects public and private information
In a semi-strong form of market efficiency, price fully reflects public and private information
Efficient securities markets lead to abnormal returns for sophisticated investors
Efficient securities markets lead to abnormal returns for sophisticated investors
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