When a Market Is Externally Efficient,it Means That

question 8

Multiple Choice

When a market is externally efficient,it means that

• A) Timely and accurate information is available
• B) The market is liquid
• C) Transaction costs are low
• D) Prices adjust rapidly to new information
• E) The number of buyers and sellers are the same

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Definitions:

Null Hypothesis

A statistical presumption positing that there is no notable difference or impact.

Statistical Probability

A measure quantifying the likelihood that an event will occur, calculated based on statistical evidence.

T-test

A technique in statistics for comparing the means of two groups to see if they differ in a statistically significant way.

Alpha

Often referred to as the level of significance in hypothesis testing, it represents the threshold at which the null hypothesis is rejected.