1. True or false? The efficient-market hypothesis assumes that a. There are no taxes. b. There is perfect foresight. c. Successive price changes are independent. d. Investors are irrational. e. There...

1. True or false?

The efficient-market hypothesis assumes that

a. There are no taxes.

b. There is perfect foresight.

c. Successive price changes are independent.

d. Investors are irrational.

e. There are no transaction costs.

f. Forecasts are unbiased.

2. True or false?

a. Financing decisions are less easily reversed than investment decisions.

b. Tests have shown that there is almost perfect negative correlation between successive price changes.

c. The semi strong form of the efficient-market hypothesis states that prices reflect all publicly available information.

d. In efficient markets the expected return on each stock is the same.