We Can Expect That the U

question 13

Multiple Choice

We can expect that the U.S.stock markets will be efficient for all of the following reasons EXCEPT:

• A)A large number of rational,profit-maximizing investors exist who actively participate in the U.S.market by analyzing,valuing,and trading stocks.
• B)The U.S.economy is the largest in the world,with the most sophisticated investors.
• C)Information is costless and widely available to market participants at approximately the same time.
• D)Investors react quickly and fully to the new information,causing stock prices to adjust accordingly.

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Definitions:

Equilibrium Price

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Legal Services

Professional services provided by lawyers or law firms to advise clients on legal rights and obligations, or represent them in legal matters.

Marginal Expenditure

The extra expense that comes from buying an additional unit of a product or service.

Labor Market

The marketplace in which employers find workers and workers find jobs, characterized by the supply and demand for labor.