Individuals that continually monitor the ﬁnancial markets seeking mispriced securities:
A)tend to make substantial proﬁts on a daily basis.
B)tend to make the markets more eﬃcient.
C)are never able to ﬁnd a security that is temporarily mispriced.
D)are always quite successful using only well-known public information as their basis of
Evaluation.
E)are always quite successful using only historical price information as their basis of
Evaluation.

Question

Quizplus · Accepted Answer

Individuals that continually monitor the financial markets seeking mispriced securities tend to make the markets more efficient. As they identify mispricings, they will buy or sell the securities, which will cause the price to move towards its true value, ultimately making the market more efficient. While they may make profits from time to time, it is not always guaranteed, and they may not always be successful using only public or historical information.

Individuals That Continually Monitor the ﬁNancial Markets Seeking Mispriced Securities