An Efficient Market Is Characterized by the Fact That

question 227

Multiple Choice

An efficient market is characterized by the fact that

• A) output is steady or growing and there is low inflation.
• B) profit opportunities are eliminated almost instantaneously.
• C) there are no opportunity costs.
• D) wealth is distributed fairly.

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Definitions:

Employee Options

A form of employee benefit that gives employees the right to purchase company stock at a set price at a future date.

Debt Options

Financial instruments giving the holder the right, but not the obligation, to deal with debt under specified conditions.

Calls

Options contracts giving the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a specified price within a specified time.

American Options

Options that can be exercised at any time up to the expiration date, unlike European options which can only be exercised on the expiration date.