The Foreign Exchange Market Is NOT Efficient Because

question 43

Multiple Choice

The foreign exchange market is NOT efficient because

• A) market participants do not compete with one another due to the fact that exchange takes place around the world and not in a single centralized location.
• B) dealers have ask prices that are higher than bid prices.
• C) central governments dominate the foreign exchange market and everybody knows that by definition, central governments are inefficient.
• D) none of the reasons listed are accurate because the foreign exchange market is efficient.

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Definitions:

Annual Dividend

The annual dividend is the total dividend payment a company pays to its shareholders for the year, often related to its profitability.

Annual Dividend

The total amount of dividends that a company pays to its shareholders for each share they own in a given fiscal year.

Rate of Return

The profit or deficit experienced by an investment within a certain timeframe, depicted as a percentage of the investment's original price.