Efficient markets
A) Provide excess profit to rational investors
B) Fully reflect relevant information
C) Need to have limited daily trading
D) Prevent sudden movements in stock prices
E) Tend to exist when competition is restricted

Question

Quizplus · Accepted Answer

Efficient markets are those that fully reflect all relevant information, making it difficult for investors to consistently earn excess profits through trading. This is because any new information that becomes available is quickly incorporated into the stock price, leaving little opportunity for investors to capitalize on it. The other choices are not accurate descriptions of efficient markets.

Efficient Markets