Efficient capital markets are financial markets:
A) in which current market prices reflect available information.
B) in which current market prices reflect the present value of securities.
C) in which there is no excess profit from using available information.
D) All of these.
E) None of these.

Question

Quizplus · Accepted Answer

Efficient capital markets are financial markets where the current market prices of securities reflect all available information, which means that investors cannot earn excess profits from using available information. Therefore, both options A and C are correct, and option B is also true since present value calculations are one method of determining securities’ fair values. Thus, the correct answer is D, all of these.

Efficient Capital Markets Are Financial Markets