If market efficiency is identified with parity,currency markets that are ________ provide no opportunities for currency traders to earn profits.

Question

Quizplus · Accepted Answer

In currency markets, market efficiency is identified with parity, which means that exchange rates reflect all available information, including economic and political factors. If exchange rates are in parity, there are no opportunities for currency traders to earn excess profits through trading. Therefore, currency markets that are in parity provide no opportunities for currency traders to earn profits. Options A, C, and D are incorrect because they do not represent the condition of parity, which is necessary for market efficiency.

If Market Efficiency Is Identified with Parity,currency Markets That Are