Which of the following best describe Efficient Market Theory and Behavioral Finance?

Multiple Choice

• Efficient Market Theory and Behavioural Finance are inversely related - the more efficient a market is the less individual behaviour will impact any equity stock price

• Efficient Market Theory and Behavioural Finance are positively related - the more efficient a market the greater impact overall behaviour will have on any equity stock price

• Efficient Market Theory and Behavioral Finance are somewhat related - one explains the extent to which a stock market is computerised/efficient and the other explains the extent to which a market behaves/responds to news/information

• Efficient Market Theory and Behavioral Finance are somewhat related in that one explains the extent to which a stock market is influenced by news/information and the other explains the extent to which attitudes and beliefs can affect stock market prices