Help
Course Catalog > Portfolios > 500
Portfolios 502: The Efficient Market Theory

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
In an efficient market, investors are actually trading information.
Choose wisely. There is only one correct answer.
True. Since prices reflect information, in an efficient market, investors are actually trading information.
2.
Which market index tracks 500 of the largest US company stocks?
Choose wisely. There is only one correct answer.
Standard and Poor's. Standard and Poor's tracks 500 of the largest US company stocks.
3.
Academics have challenged the efficient market theory because _______.
Choose wisely. There is only one correct answer.
Several irregularities have been observed. Academics have noted many irregular phenomena that caused them to call the theory into question.
4.
All possible information about a security is reflected in its price when a market's efficiency is _______.
Choose wisely. There is only one correct answer.
Strong. The stronger the efficiency, the more likely that a security's price will reflect current information.
5.
Index mutual funds attempt to beat the market.
Choose wisely. There is only one correct answer.
False. Index funds try to match the market.