Individual investors who continually monitor the financial markets seeking mispriced securities:

Question

Quizplus · Accepted Answer

Individual investors who continually monitor the financial markets seeking mispriced securities contribute to making the markets more efficient. As investors purchase undervalued securities, their prices increase, while overvalued securities decline, closing the gap between the current price and the intrinsic value of the asset. This reduces the likelihood of finding mispriced securities in the future, making markets more efficient. While there are successes, finding and exploiting mispricings is challenging, and investors may not earn abnormal profits consistently. The use of historical data alone may not provide adequate information for effective evaluation.

Individual Investors Who Continually Monitor the Financial Markets Seeking Mispriced