Which One of the Following Statements Best Defines the Efficient

question 84

Multiple Choice

Which one of the following statements best defines the efficient market hypothesis?

• A)Efficient markets limit competition.
• B)Security prices in efficient markets remain steady as new information becomes available.
• C)Mispriced securities are common in efficient markets.
• D)All securities in an efficient market are zero net present value investments.
• E)Profits are removed as a market incentive when markets become efficient.

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Definitions:

Antitrust Enforcement

The regulation and legal processes initiated by governments to prevent or reduce anti-competitive practices and promote fair competition among firms.

Horizontal Merger

A merger between firms that are in direct competition with each other, operating in the same industry and often in the same markets.

Hertz Rent-a-Car

A global car rental company offering services in various locations, providing customers with temporary vehicles for personal or business use.

Mergers

The process where two or more companies combine to form a single entity, often to enhance market share, efficiency, or competitiveness.