Which One of the Following Statements Best Defines the Efficient

question 84

Multiple Choice

Which one of the following statements best defines the efficient market hypothesis?

• A)Efficient markets limit competition.
• B)Security prices in efficient markets remain steady as new information becomes available.
• C)Mispriced securities are common in efficient markets.
• D)All securities in an efficient market are zero net present value investments.
• E)Profits are removed as a market incentive when markets become efficient.

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Definitions:

Frustration

The feeling people get when goals they are trying to attain are blocked.

Aggression

Behavior intended to harm or intimidate others, which can be physical or verbal, and is often a response to frustration or perceived threats.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a feeling of contempt for other cultures.

Prejudice

An unfounded or biased preconception or attitude towards individuals or groups based on characteristics like race, gender, or social status.