Markets would be inefficient if irrational investors __________ and actions of arbitragers were __________.
A) existed; unlimited
B) did not exist; unlimited
C) existed; limited
D) did not exist; limited

Question

Quizplus · Accepted Answer

Markets would be inefficient if irrational investors existed because their decisions can create pricing anomalies. The actions of arbitragers being limited means they cannot always correct these inefficiencies, thus contributing to market inefficiency.

Markets Would Be Inefficient If Irrational Investors __________ and Actions