An efficient market is a market that allocates funds to their most productive uses as a result of competition among wealth-maximizing investors that determines and publicizes prices which are believed to be close to their true values.

Question

Quizplus · Accepted Answer

This is the definition of an efficient market. In an efficient market, investors can use the available information to make rational investment decisions, which results in the allocation of funds to their most productive uses. Competition among investors helps to ensure that prices are accurate and reflect the true value of the assets being bought and sold.

An Efficient Market Is a Market That Allocates Funds to Their