Efficient Markets

question 6

Multiple Choice

Efficient markets:

• A) maximize total surplus.
• B) can occur without a central planner.
• C) occur when a perfectly competitive, well-functioning market is in equilibrium.
• D) All of these are true.

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Definitions:

Bankruptcy Estate

In bankruptcy proceedings, all of the debtor’s interests in property currently held and wherever located, as well as interests in certain property to which the debtor becomes entitled within 180 days after filing for bankruptcy.

Bankruptcy Proceedings

The judicial process through which a debtor is relieved from financial obligations when unable to pay back creditors, legally formalized via court orders.

Debtor's Interests

The financial or asset-based stakes a debtor holds which may be affected by legal actions such as bankruptcy or debt recovery efforts.

Liquidation

The process of winding up a company's financial affairs by selling off assets to pay creditors and distributing any remaining assets to the shareholders.