In an Efficient Market

question 326

Multiple Choice

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.

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Definitions:

Management

The act or process of planning, organizing, directing, and controlling resources and activities to achieve specific goals.

Non-Profit Organization

An entity that operates for charitable, educational, cultural, or other purposes serving the public interest, rather than for profit.

Organization

An arranged group of people and resources structured to achieve specific goals or carry out a range of activities.

Organizational Behaviour

The study of how individuals and groups act within organizations, and how these entities interact with their environments.