Security Markets Are Efficient EXCEPT for When Which of the Following

question 13

Multiple Choice

Security markets are efficient EXCEPT for when which of the following exists?

• A) Security prices follow the leading indicators such as the DJIA very closely.
• B) The markets absorb large dollar amounts of stock without destabilizing the price.
• C) Prices adjust rapidly to new information.
• D) There is a continuous market where each successive trade is made at a price close to the previous trade.

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Definitions:

Midwest

A region in the United States known for its geographical location in the central part of the country and its agricultural and industrial output.

East Coast

A term typically referring to the eastern seaboard of the United States, known for its significant historical, financial, and cultural centers.

Heuristics

Heuristics are mental shortcuts or simple strategies used to make quick and efficient decisions or solve problems, often employed when facing complex issues or incomplete information.

Availability Heuristic

A strategy for judging how frequently something happens—or how common it is—based on how easily examples of it come to mind.