The stronger version of the efficient markets hypothesis states that
A) the prices of all financial instruments reflect only the optimal forecast of the financial instrument.
B) the prices of all financial instruments reflect not only the optimal forecast of the financial instrument but also the true fundamental value of the instrument.
C) many factors have a direct effect on future income streams of the financial instruments.
D) many factors have a direct effect on value of the assets and the expected income systems of those assets on which the financial instruments represent claims.
Correct Answer:
Verified
Q9: Adaptive expectations are formed by looking at
A)the
Q10: Rational expectations are formed by looking at
A)the
Q11: Which of the following are implications of
Q12: The optimal forecast is
A)the best guess possible
Q13: The efficient market hypothesis states that when
Q15: Which of the following is false with
Q16: The _ states that in equilibrium, prices
Q17: Which of the following is false?
A)If information
Q18: The allocation of surplus funds to a
Q19: A stock represents
A)credit risk by the issuer.
B)ownership
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