16) There is empirical evidence that financial markets are semistrong form efficient.

True

False

17) Prices in strong form efficient markets incorporate all public and private information.

True

False

18) Which of these, if true, would undermine the concept of market efficiency?

A)		Amateur investors are often emotional, leading them to make irrational pricing decisions
B)		Large securities firms engage in mass scale arbitrage across multiple markets using advanced IT
C)		In the short-run broad social influence can lead to investors overall being optimistic or pessimistic
D)		All of the above

19) Which of the following is not an implication of the efficient markets hypothesis?

A)		Accounting and financing decisions affect market values
B)		Security prices reflect underlying values
C)		It is possible to earn a long-run profit speculating on foreign currencies
D)		Managers cannot time stock and bond sales

20) According to behavioral finance studies, which of the following behavior tendencies can harm market efficiency?

A)		Due to the confirmation bias, when people expect security prices to rise and they do, they begin to believe that they are correct and that prices will always rise, causing them to become overconfident
B)		People are loss-averse; they remember losses more than gains, which causes them to become pessimistic and undervalue stocks
C)		People are overconfident in their own judgements, leading them to trade on the, usually always, incorrect assumption that the market is wrong
D)		All of the above