In Efficient Markets, Differences in Ex Post Returns Reflect Either

question 42

True/False

In efficient markets, differences in ex post returns reflect either different levels of risk selected by the players or pure random factors (luck)

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Definitions:

Arbitrageurs

Traders who seek to profit from price discrepancies of the same asset in different markets, buying low in one market and selling high in another.

Speculator

Someone who buys or sells foreign exchange in hopes of profiting from fluctuations in the exchange rate over time.

Exchange Rate

How much one currency is worth in terms of crossing over to another currency.

Mexican Demand Curve

A graphical representation showing the quantity of goods that consumers in Mexico are willing and able to purchase at various prices.