Which of the Following Is NOT an Underlying Assumption of the Existence

question 29

Multiple Choice

Which of the following is NOT an underlying assumption of the existence of an efficient market?

• A)A large number of rational, profit-maximizing investors exist.
• B)Information is costless and widely available to market participants.
• C)Information arrives at predetermined times.
• D)Investors react quickly and fully to new information.

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Definitions:

Monthly Interest Rate

The interest rate charged on a loan or realized on an investment over a month's time period.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, which can impact cash flow and sales.

Monthly Interest Rate

The interest rate charged or paid on a loan or savings account calculated on a monthly basis.

Default Rate

The percentage of borrowers who fail to repay their loans or meet contractual obligations.