According to the efficient market hypothesis, which of the following statements is not correct?
a. Stock market prices tend to rise today if they rose yesterday.
b. As judged by the typical person in the market, all stocks are fairly valued all the time.
c. At the market price, the number of shares being offered for sale matches the number of shares people want to buy.
d. All of the above statements are incorrect.
a
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Leona and Bernie have committed a crime. If Leona denies committing the crime, Bernie can lower his penalty from 5 years to 2 years by confessing to the crime
If Leona confesses to the crime, Bernie can lower his penalty from 18 years to 7 years by confessing to the crime. Based on this information, we know with certainty that A) Bernie's dominant strategy is to deny the crime. B) Bernie has no dominant strategy. C) Bernie's dominant strategy is to confess to the crime. D) Bernie's dominant strategy is to confess to the crime only if Leona denies committing the crime.
In the scenario above, if both firms cheat on the agreement, producing more than the agreed amount, then
A) each firm makes zero economic profit. B) the outcome is identical to a monopoly. C) the industry's economic profit is the maximum profit that can be made by the duopoly. D) each firm makes a greater economic profit than it would make if it complied with the agreement.