Which of the following is an underlying assumption of the existence of an efficient market?
A)A small number of rational, profit-maximizing investors exist.
B)Information is costly and not widely available to market participants.
C)Investors don't react quickly and fully to new information.
D)None of the above

Question

Quizplus · Accepted Answer

The concept of an efficient market assumes that all available information is already reflected in stock prices, implying that information is widely available and investors react quickly to new information, which contradicts options A, B, and C.

Which of the Following Is an Underlying Assumption of the Existence