Answer:
a. FALSE
The Efficient Market Hypothesis has no assumption that limits the role of taxes in the model so this statement is false.
b. FALSE
The model does believe in the notion of imperfect foresight because the model follows the assumption that it is not possible to estimate stock price with absolute accuracy.
c. TRUE
The model does indeed believe this because it assumes that the price on a day is independent of the price of the same stock on another day.
d. FALSE
It it believed that investors are rational.
e. FALSE
Transaction costs are catered for in the model so this statement is incorrect.
f. TRUE
As much as possible, the model does not allow for the creation of biased forecasts as it strives for no bias in its forecasts.
