Exam 4: Efficient Markets, Investment Value, and Market Price

A market for securities in which those firms with the most promising investment opportunities have access to the needed funds is known as a(an) ____ efficient market.

In a perfectly efficient market with random price changes,

Short sellers not receiving the revenues from the security sale

Short sellers

The Securities and Exchange Commission prefers to address _____ efficiency by promoting rules that affect the design and operations of the markets.

Weak-form efficient markets use all of the following EXCEPT

A stock with an elastic demand-to-hold schedule

In perfectly efficient markets, the investors who have profited in the past

A market for securities in which information is quickly and widely disseminated, thereby allowing each security's price to adjust rapidly in an unbiased manner to new information so that the price reflects investment value is known as a(an) ____ efficient market.

Event studies to test for market efficiency would NOT be concerned with the following:

The present value of a security's future prospects is its

Firms with the most promising investment opportunities are given ready access to needed funds in an ____ efficient market.

Testing for market efficiency is often conducted using _____ where it can be seen just how fast security prices actually react to the release of information.

Securities with few close substitutes are considered unique and this relation means that the aggregate demand-to-buy schedule will be

A situation in which security price changes follow an independent and identically distributed process, except for that those price changes are expected to rise over time, is known as a

In a perfectly efficient market

The theory that states that daily stock price changes are independent and identically distributed is

Testing market efficiency is often done using an examination of the performance of

A weak-form market assumes security prices reflect

Which one of the following methods is NOT used to test for market efficiency?