In an Efficient Market

question 55

Multiple Choice

In an efficient market,

• A) security prices react quickly to new information.
• B) security prices are seldom far above or below their justified levels.
• C) security analysis will not enable investors to realize superior returns consistently.
• D) one cannot make money.
• E) security prices react quickly to new information, security prices are seldom far above or below their justified levels, and security analysis will not enable investors to realize superior returns consistently.

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Definitions:

Representative

A representative is someone chosen or elected to speak, act, or make decisions on behalf of a group or constituency.

Population

The total number of people inhabiting a particular area, region, or country.

Volunteers

Individuals who offer their time, skills, and efforts for a cause or service without expecting monetary compensation.

Research Process

A series of steps that guide the systematic investigation and study of materials and sources to establish facts and reach new conclusions.