Asked by
Leslie Lopez
on Nov 07, 2024
Verified
In an efficient market:
A) Prices are constant over the short-term.
B) Every investment in a security will yield a positive return.
C) The risk premium on all securities will diminish to zero.
D) Prices react quickly and correctly to new information.
E) Future price performance is easy to predict, especially for the short run.
Efficient Market
A market theory suggesting that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.
Prices
The sum of money anticipated, needed, or provided as compensation for something.
New Information
Fresh data or insights that have not been previously available or considered, commonly impacting financial markets and investment decisions.
- Acquire knowledge about market efficiency and its various forms such as weak, semi-strong, and strong.
- Investigate the consequences of market efficiency on the pricing of shares and the crafting of investment plans.
Verified Answer
BW
Learning Objectives
- Acquire knowledge about market efficiency and its various forms such as weak, semi-strong, and strong.
- Investigate the consequences of market efficiency on the pricing of shares and the crafting of investment plans.