In an Efficient Market, Prices Appear to Move Randomly Because

question 57

Multiple Choice

In an efficient market, prices appear to move randomly because

• A) investors do not process new information correctly.
• B) only new information affects stock prices.
• C) insider trading has an unpredictable effect on stock prices.
• D) the number of investors who can forecast prices correctly is too small to have any effect.

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Definitions:

Underground

Beneath the surface of the Earth, including areas such as caves, tunnels, and mined spaces.

Cooling Magma

The process of molten rock solidifying as it cools, forming igneous rock.

Igneous Rock

Igneous rock forms from the cooling and solidification of magma or lava and can be found at or beneath the surface of the Earth.

Weathering

The process by which rocks and minerals break down into smaller pieces by physical, chemical, or biological means, leading to the formation of soil and sediments.