Which One of the Following Statements Is Correct Concerning Market

question 35

Multiple Choice

Which one of the following statements is correct concerning market efficiency?

• A) Real asset markets are more efficient than financial markets.
• B) If a market is efficient, arbitrage opportunities should be common.
• C) In an efficient market, some market participants will have an advantage over others.
• D) A firm will generally receive a fair price when it sells shares of stock.

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Definitions:

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and that parties to a contract are presumed to follow.

Customs

The official department that oversees the importation and exportation of goods in and out of a country, implementing national regulations and duties.

Practices

refers to habitual actions or procedures followed by individuals or organizations in a particular field or profession.

Good Faith

Acting with honesty, fairness, and sincerity in transactions and legal matters without intent to defraud or seek unfair advantage.