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:

Automatic Stay

A provision in bankruptcy proceedings that halts most legal actions against the debtor, providing temporary relief from creditors, evictions, and certain lawsuits.

Legal Action

The formal process of resolving disputes by a court of law, including lawsuits and litigation.

Punitive Damages

Punitive damages are financial compensation awarded to a plaintiff, over and above the actual damages, intended to punish the defendant for egregious wrongdoing and deter future similar acts.

Order Of Relief

An order from a bankruptcy court that temporarily or permanently relieves the debtor from certain debts or legal action by creditors.