Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 6

In each of the following examples say whether the market is behaving within the principles of the efficient-market hypothesis.
a. The day after unrest in the Middle East, the source of supply for much of the world's oil, the price of oil falls. b. Investors find very few opportunities for arbitrage in the foreign exchange market.
c. The Dow Jones Industrial Average, a major stock market index, changes in value by 5 percent for an entire week, even though very little economic news is released.