Which of the Following Is a Characteristic of an Efficient

question 78

Multiple Choice

Which of the following is a characteristic of an efficient market?

• A) Small number of individuals
• B) Opportunities exist for investors to profit from publicly available information.
• C) Security prices reflect fair value of the firm.
• D) Immediate response occurs for new public information.

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Definitions:

Time Preference

This concept describes individuals' preference for immediate benefits over future ones, influencing their decisions on saving, investing, and consumption.

Time Preference

An individual's preference for receiving goods or services sooner rather than later.

Capital Goods

Long-term physical assets used in the production of goods or services, such as machinery and buildings.

Current Consumption

The total amount of goods and services consumed at the present time, as opposed to savings for future consumption.