Efficient Capital Markets Are Financial Markets

question 42

Multiple Choice

Efficient capital markets are financial markets:

• A) in which current market prices reflect available information.
• B) in which current market prices reflect the present value of securities.
• C) in which there is no excess profit from using available information.
• D) All of these.
• E) None of these.

---

Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows in a given period, indicating how much cash is generated or spent.

Income Taxes

Taxes levied by the government on earnings generated by businesses and individuals within their jurisdiction.

Capital Budgeting Decisions

The process of evaluating and selecting long-term investments that are in line with the firm's goal of maximizing shareholder value.

Future Outcomes

Possible events or results that have not yet occurred and may be influenced by current actions or decisions.