An Efficient Market Is a Market That Establishes Correct Prices

question 19

True/False

An efficient market is a market that establishes correct prices for the securities that firms sell and allocates funds to their most productive use as a result of the intense competition among investors.

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Definitions:

Hobbes

Refers to Thomas Hobbes, a 17th-century English philosopher known for his work on political philosophy and his social contract theory, as outlined in his book "Leviathan."

Locke

Refers to John Locke, a 17th-century English philosopher known for his work in political philosophy, particularly regarding the development of liberalism.

Montesquieu

A French political philosopher of the Enlightenment period, best known for his theory of separation of powers, which has been incorporated into many constitutions around the world.

Charles Beard

An influential American historian who proposed that the U.S. Constitution was a product of economically motivated interests.