EMH group 2

In an efficient market, prices appear to move randomly because

• investors do not process new information correctly

•  only new information affects stock prices

• insider trading has an unpredictable effect on stock prices

• the number of investors who can forecast prices correctly is too small to have any effect

Which one of the following activities is likely to be useful if the market is only weak form efficient?

•  attempting to find the best times to buy and sell

• attempting to find repeating pattern in stock price behavior

• attempting to determine if stock prices have upward or downward momentum

• None of the above would be useful

The strong form of the efficient market hypothesis contends that

• a select few institutional investors can earn abnormal profits

•  abnormal profits are randomly distributed

• no one can consistently earn a profit

• no one can consistently earn abnormal profits

 How many form of EMH ?

What are the forms of the EMH? 

• Weak form

• Normal form

• Semi form

• Strong form

What types of markets does the EMH apply to? 

• Stocks

• Bonds

• Options

• Currencies

Which of the following orders would allow you to sell a stock if it falls to a specified price?

• Market Sell

• Limit-Sell

• Stop-Sell

• Short Sell

In order to make market efficient____________.

• information must be equally accessible to all investors.

• information must be kept by the companies privately.

• information must be release only when it is necessary.

• All of the above.

An efficient market does not require that:

• stock prices incorporate all information.

• all known information be reflected in prices.

• price adjustments occur very quickly.

• each adjustment be perfect.

Prices reflect all the security - market information contained in past prices refers to

• Strong form

• Weak form

• Semi form

• None