Security Markets Are Efficient When Each of the Following Exist

question 5

Multiple Choice

Security markets are efficient when each of the following exist except:

• A) security prices follow the leading indicators such as the S&P/TSX Composite very closely.
• B) the markets can 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:

Individualist

A person who prioritizes personal goals over group goals, emphasizing independence and self-reliance.

Zajonc's Drive Theory

A psychological theory suggesting the presence of others (an audience) increases arousal, which can enhance the performance of well-learned tasks but impede the performance on complex or new tasks.

Social Facilitation

The phenomenon whereby an individual's performance improves when they are in the presence of others, typically due to increased arousal.

Dominant Response

The reaction or behavior that is most likely to be displayed by an individual in a given situation under pressure or stress.