In an Efficient Market, It Is Believed by Some Individuals

question 8

Multiple Choice

In an efficient market, it is believed by some individuals that the actions of traders who constantly buy and sell on any perceived market mispricings will in effect cause market prices to correctly
Reflect asset values. A person who believes that the actions of these traders will not result in
Correctly valued prices is most apt to believe in which one of the following?

• A) Gambler's fallacy.
• B) Limits to arbitrage.
• C) Availability bias.
• D) False consensus.
• E) Clustering illusion.

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