In an Efficient Market

question 55

Multiple Choice

In an efficient market,

• A) security prices react quickly to new information.
• B) security prices are seldom far above or below their justified levels.
• C) security analysis will not enable investors to realize superior returns consistently.
• D) one cannot make money.
• E) security prices react quickly to new information, security prices are seldom far above or below their justified levels, and security analysis will not enable investors to realize superior returns consistently.

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Definitions:

Strength Relationship

The degree to which two variables are related or associated with each other, often used in the context of correlation analysis.

Forecasting Time Horizons

The periods into which future predictions or plans for business, economic, or other activities are divided, ranging from short-term to long-term.

Forecast Average

The mean value of predicted outcomes over a specified future period, often used in demand planning and inventory management.

Trend

A general direction in which something is developing or changing, often used in the context of markets or fashion.