Which of the following tend to reinforce the argument that the financial markets are efficient?
I. Information spreads rapidly in today's world.
II. There is tremendous competition in the financial markets.
III. Market prices continually fluctuate.
IV. Market prices react suddenly to unexpected news announcements.
A) I and III only
B) II and IV only
C) I, II, and III only
D) II, III, and IV only
E) I, II, III, and IV

Question

Quizplus · Accepted Answer

Efficient markets are characterized by rapid dissemination of information (I), high competition (II), and quick reactions to new information (IV). While price fluctuations (III) alone don't indicate efficiency, they can reflect the market's response to new information.

Which of the Following Tend to Reinforce the Argument That