An efficient market is a market that allocates funds to their most productive use as a result of competition among wealth-maximizing investors.

Question

Quizplus · Accepted Answer

An efficient market is characterized by the ability of prices to adjust promptly to new information or changes in supply and demand. This leads to fair pricing and efficient allocation of resources, as investors will always seek to invest in the projects or assets that offer the highest returns for a given level of risk. In an efficient market, any attempt to outperform the market by using insider knowledge or other strategies will be futile, as prices will quickly adjust to reflect such information.

An Efficient Market Is a Market That Allocates Funds to Their