Which One of the Following Statements Best Defines the Efficient

question 84

Multiple Choice

Which one of the following statements best defines the efficient market hypothesis?

• A)Efficient markets limit competition.
• B)Security prices in efficient markets remain steady as new information becomes available.
• C)Mispriced securities are common in efficient markets.
• D)All securities in an efficient market are zero net present value investments.
• E)Profits are removed as a market incentive when markets become efficient.

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Definitions:

Judging Types

In psychology, it refers to ways individuals make decisions, often discussed in the context of personality assessments like the Myers-Briggs Type Indicator.

Feeling Types

Individuals who prioritize emotions and personal values in decision-making, often contrasted with thinking types who focus on logic and objectivity.

Myers-Briggs Typology

A personality framework that categorizes individuals into 16 distinct personality types based on four dichotomies, aiming to explain differences in human behavior.

Extraversion-Introversion Dichotomy

The extraversion-introversion dichotomy is a concept in psychology that classifies individuals on a spectrum based on their preference towards external stimulation or inward reflection.