Which of the Following Would Be Indicative of Inefficient Markets

question 46

Multiple Choice

Which of the following would be indicative of inefficient markets?

• A)Overreaction and reversion
• B)Delayed response
• C)Immediate and accurate response
• D)Both A and B.
• E)Both A and C.

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Definitions:

Conversion Price

Stating the conversion ratio along with the bond’s par value.

Fixed Number

A specific, unchanging quantity or value, often used in contexts requiring precise, constant measurements or counts.

Secured Bonds

Bonds that are backed by collateral, such as real estate or other assets, to reduce the risk of default to investors.

Bond Principal

The face value of a bond, or the amount of money the bond issuer will pay back to the bondholder at maturity.