The Efficient Markets Hypothesis States That

question 46

Multiple Choice

The efficient markets hypothesis states that:

• A) the price of assets already reflects all publicly available information.
• B) arbitrage is impossible in financial markets.
• C) in financial markets both buyers and sellers will be equally informed.
• D) financial markets are, on average, more efficient than product markets.

---

Definitions:

Economic Efficiency

A measure of how well resources are allocated to maximize the production of goods and services.

Income Distribution

The way in which total income is divided among the population or different groups within society.

Redistributing Income

The process of adjusting the distribution of income within a society, typically through taxation and government spending.

Consumer Satisfaction

A measure of how products and services supplied by a company meet or surpass customer expectation.