What the three forms of market efficiency are — weak, semi-strong, strong

What the efficient market hypothesis claims — prices reflect all available information

Efficient Market Hypothesis: Prices incorporate all publicly available information

What is the principle of Pareto efficiency in welfare economics and how does it relate to the concept of market equilibrium?

Pareto efficiency ensures no welfare improvement without disadvantaging others, aligning with market equilibrium where no trades can make someone better off without harming others

What the Black-Scholes assumptions are — constant volatility, no dividends, log-normal prices, no transaction costs

Black-Scholes assumes constant volatility, no dividends, log-normal price distribution, and no transaction costs

What a Giffen good is — a good where demand increases as price increases (very rare)

Giffen good: Increased price leads to higher demand due to inferior necessity

What a Veblen good is — a luxury good where higher price increases desirability

A Veblen good is a luxury item whose demand increases as its price rises, due to perceived exclusivity

What the efficient frontier is — the set of portfolios with maximum return for each risk level

The efficient frontier represents optimal portfolios with highest returns for given risk levels