When a Market Is Externally Efficient,it Means That

question 8

Multiple Choice

When a market is externally efficient,it means that

• A) Timely and accurate information is available
• B) The market is liquid
• C) Transaction costs are low
• D) Prices adjust rapidly to new information
• E) The number of buyers and sellers are the same

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Definitions:

Standard Normal Distribution

A statistical distribution with a mean of 0 and a standard deviation of 1, where data fits a specific pattern that is symmetrical around the mean.

Chi-squared Distribution

A probability distribution that arises in statistics when estimating how closely an observed distribution matches an expected distribution.

Interval Data

A type of data measurement where the order of the data points is meaningful and the difference between data points is consistent and measurable.

Nominal Data

Information grouped into categories without an inherent numerical value or order, such as colors or gender.