Efficient Securities Markets EMH Full Form Quiz
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Questions and Answers

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?

  • Random form
  • Semi-strong form
  • Weak form
  • Strong form (correct)
  • 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?

    <p>Stock price reacts to accounting information, hence full disclosure is important.</p> Signup and view all the answers

    According to the Efficient Securities Markets EMH, what does investing in an efficient market resemble?

    <p>&quot;A fair game&quot; with no bargains.</p> Signup and view all the answers

    According to the Efficient Securities Markets EMH, security prices reflect inside information

    <p>False</p> Signup and view all the answers

    In a weak form of market efficiency, prices fully reflect historical information

    <p>True</p> Signup and view all the answers

    Market efficiency implies that investing is a fair game with no bargains

    <p>True</p> Signup and view all the answers

    In a semi-strong form of market efficiency, price fully reflects public and private information

    <p>False</p> Signup and view all the answers

    Efficient securities markets lead to abnormal returns for sophisticated investors

    <p>False</p> Signup and view all the answers

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