What Is Meant by the Statement That an Efficient Market

question 52

Multiple Choice

What is meant by the statement that an efficient market prices securities correctly?

• A) The prices reported by the securities exchanges accurately reflect real transactions.
• B) Riskier securities are priced to yield higher returns.
• C) The expected return on securities is equal to the risk-free return.
• D) Both buyers and sellers agree that the prices are fair.

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Definitions:

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Language that is clear and exact, with no ambiguity or vagueness.

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Communication that is clear, specific, and detailed, making it easily understood by the receiver.

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