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 because their actions lead to the correction of mispricing and more accurate pricing of securities. They may make profits on a daily basis, but this is not guaranteed and depends on the level of market efficiency and the individual's ability to identify mispricings. They may also use a combination of public and private information to evaluate securities.

Individuals That Continually Monitor the Financial Markets Seeking Mispriced Securities