In general,markets are efficient when

Question

Quizplus · Accepted Answer

All the options listed are characteristics of an efficient market. When prices respond quickly to new information, it means that the market is incorporating new information effectively, making it difficult for investors to outperform the market. Each successive trade being made at a price close to the preceding price shows that the market is liquid and information is being disseminated evenly among market participants. Finally, the ability of a market to absorb large amounts of securities or assets without affecting prices significantly is a further indication of its efficiency. Hence, all the options are essential characteristics of an efficient market.

In General,markets Are Efficient When