Which One of the Following Statements Is Correct Concerning Market

question 58

Multiple Choice

Which one of the following statements is correct concerning market efficiency?

• A) Real asset markets are more efficient than financial markets.
• B) If a market is efficient, arbitrage opportunities should be common.
• C) In an efficient market, some market participants will have an advantage over others.
• D) A firm will generally receive a fair price when it sells shares of stock.
• E) New information will gradually be reflected in a stock's price to avoid any sudden change in the price of the stock.

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Definitions:

Democracy

A form of government in which power is vested in the hands of the people and exercised by them directly or through freely elected representatives.

Morality

Principles and beliefs concerning the distinction between right and wrong or good and bad behavior.

Sixteenth Amendment

Constitutional amendment passed in 1913 that legalized the federal income tax.

Graduated Income Tax

A tax system where the tax rate increases as the taxable amount increases, imposing higher rates on higher income earners.