Security Markets Are Efficient When Each of the Following Exist

question 51

Multiple Choice

Security markets are efficient when each of the following exist except

• A) there is a continuous market where each successive trade is made at a price close to the previous trade.
• B) the markets can absorb large dollar amounts of stock without destabilizing the price.
• C) prices adjust rapidly to new information.
• D) all of the other conditions must exist.

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Definitions:

Equity Sensitivity

An individual difference in preference for equity or fairness in social exchange situations, affecting their reactions to perceived inequities.

Entitleds

Individuals who believe they deserve certain privileges or treatment irrespective of their actual achievements or contributions.

Overreward Inequity

A situation where an individual perceives they are receiving more rewards than what their efforts justify.

Underrewarded

The feeling or situation that arises when an individual perceives that their rewards or compensations do not reflect their contributions or efforts adequately.