What is the basic assertion of the efficient capital market theory? What are the implications of an "efficient market" for:
Definitions:
Irrational
Describes a decision maker who chooses an option that leaves him or her worse off than choosing another available option.
Rational Decision
A decision-making process that is based on making choices that result in the optimal level of benefit or utility for the individual.
Economic Payoff
The return or financial gain from an investment or decision in the context of economics.
Sunk Costs
Costs that have already been incurred and cannot be recovered or refunded.
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