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Advanced Wealth Management Course (IIBF) - Paper 3
Part III: Ch 2: Introduction to Efficient Market Hypothesis
Q
1
.
Which Market Hypothesis is popularly known as the Random Walk Theory?
Weak-Form Efficient Market Hypothesis
Semi-Strong-Form Efficient Market Hypothesis
Strong-Form Efficient Market Hypothesis
None of the above
Q
2
.
(I) Capital Market efficiency is more restrictive than the concept for perfect capital markets. (II) In Weak-Form Efficient Market Hypothesis, it is assumed that all publicly available information about an asset is already reflected in its price.
Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong
Q
3
.
In the Strong-From Efficient Market Hypothesis, all information, either public or private, is already reflected in the stock prices.
True
False
Q
4
.
(I) Technical analysts determine the intrinsic value of a company at a point in time by studying the economic variables such as future earnings, interest rates and risk factors. (II) The Strong-Form Efficient Market Hypothesis encompasses both the Weak-Form Efficient Market Hypothesis and Semi-Form Efficient Market Hypothesis.
Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong
Q
5
.
The efficient market hypothesis is inconsistent with Fundamental Analysis.
True
False
Q
6
.
In an efficient capital market asset prices adjust rapidly to the arrival of new information and current market price of an asset reflects all available information about that asset.
True
False