Security Markets Are Efficient When Each of the Following Exist

question 46

Multiple Choice

Security markets are efficient when each of the following exist except

• A) security prices follow the leading indicators such as the DJIA very closely.
• B) the markets can absorb large dollar amounts of stock without destabilizing the price.
• C) prices adjust rapidly to new information.
• D) there is a continuous market where each successive trade is made at a price close to the previous trade.

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Definitions:

Porter's Strategy

Refers to competitive strategies introduced by Michael Porter, including cost leadership, differentiation, and focus strategies aimed at gaining competitive advantage.

Competitive Advantage

An advantage over competitors in some measure such as cost, quality, or speed; leads to control of a market and to larger-than-average profits.

Virtual Reality

An interactive computer-generated experience taking place within a simulated environment, incorporating mainly auditory and visual, but sometimes other types of sensory feedback.

Prerace Inspections

Assessments or checks performed on vehicles before they are allowed to compete in a race, ensuring compliance with safety and performance standards.