Which of the following is NOT an underlying assumption of the existence of an efficient market?
A)A large number of rational, profit-maximizing investors exist.
B)Information is costless and widely available to market participants.
C)Information arrives at predetermined times.
D)Investors react quickly and fully to new information.

Question

Quizplus · Accepted Answer

The assumption that information arrives at predetermined times is not part of the efficient market hypothesis. In fact, one of the key aspects of an efficient market is that information arrives randomly and unexpectedly, and is quickly assimilated into prices by investors. A, B, and D are all underlying assumptions of an efficient market.

Which of the Following Is NOT an Underlying Assumption of the Existence