Fi
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Chapter6AreFi
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cialMarketsEfficie
t
61MultipleChoice
1Howexpectatio
sareformedisimporta
tbecauseexpectatio
si
flue
ceAthedema
dforassetsBbo
dpricesCtheriskstructureofi
terestratesDthetermstructureofi
terestratesEalloftheaboveA
swerETopicChapter61TheEfficie
tMarketHypothesisQuestio
StatusPreviousEditio
2Accordi
gtotheefficie
tmarkethypothesisthecurre
tpriceofafi
a
cialsecurityAisthediscou
ted
etprese
tvalueoffuturei
terestpayme
tsBisdetermi
edbythehighestsuccessfulbidderCfullyreflectsallavailablereleva
ti
formatio
Disaresultof
o
eoftheaboveA
swerCTopicChapter61TheEfficie
tMarketHypothesisQuestio
StatusPreviousEditio
3Theefficie
tmarkethypothesisAisbasedo
theassumptio
thatpricesofsecuritiesfullyreflectallavailablei
formatio
Bholdsthattheexpectedretur
o
asecurityequalstheequilibriumretur
CbothAa
dBD
eitherA
orBA
swerCTopicChapter61TheEfficie
tMarketHypothesisQuestio
StatusPreviousEditio
4Iftheoptimalforecastoftheretur
o
asecurityexceedstheequilibriumretur
the
Athemarketisi
efficie
tBa
u
exploitedprofitopportu
ityexistsCthemarketisi
equilibriumDo
lyAa
dBoftheabovearetrueEo
lyBa
dCoftheabovearetrueA
swerDTopicChapter61TheEfficie
tMarketHypothesis
fQuestio
StatusPreviousEditio

f5Accordi
gtotheefficie
tmarkethypothesisAo
eca
otexpecttoear
a
ab
ormallyhighretur
bypurchasi
gasecurityBi
formatio
i
ewspapersa
di
thepublishedreportsoffi
a
ciala
alystsisalreadyreflectedi
marketpricesCu
exploitedprofitopportu
itiesabou
dtherebyexplai
i
gwhysoma
ypeoplegetrichbytradi
gsecuritiesDalloftheabovearetrueEo
lyAa
dBoftheabovearetrueA
swerETopicChapter61TheEfficie
tMarketHypothesisQuestio
StatusPreviousEditio
6A
otherwaytostatetheefficie
tmarketco
ditio
isthati
a
efficie
tmarketAu
exploitedprofitopportu
itieswillbequicklyelimi
atedBu
exploitedprofitopportu
itieswill
everexistCarbitrageursguara
teethatu
exploitedprofitopportu
ities
everexistDbothAa
dCoftheaboveoccurA
swerATopicChapter61TheEfficie
tMarketHypothesisQuestio
StatusPreviousEditio
7A
otherwaytostatetheefficie
tmarkethypothesisisthati
a
efficie
tmarketAu
exploitedprofitopportu
itieswill
everexistasmarketparticipa
tssuchasarbitrageurse
surethattheyarei
sta
ta
eouslydissipatedBu
exploitedprofitopportu
itieswill
otexistforlo
gasmarketparticipa
tswillactquicklytoelimi
atethemCeveryfi
a
cialmarketparticipa
tmustbewelli
formedaboutsecuritiesDo
lyAa
dCoftheaboveA
swerBTopicChapter61TheEfficie
tMarketHypor