All of the Following Are Necessary Conditions for an Efficient

question 86

Multiple Choice

All of the following are necessary conditions for an efficient market EXCEPT

• A) low trading or transaction costs.
• B) many buyers and sellers.
• C) free and readily available information to market participants.
• D) low stock prices.

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Definitions:

Securities Exchange Act

The Securities Exchange Act is a U.S. federal law that governs the trading of securities, such as stocks and bonds, to protect investors against fraud and to regulate the securities industry.

Scienter

A legal term referring to the knowledge of wrongdoing, particularly in cases of fraud or deceit.

Fraud

The intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Scienter

Knowledge of the wrongful nature of one's actions, particularly in the context of securities fraud.