When a market is internally efficient, it means that the market has
A) price continuity.
B) minimal transactions costs.
C) good depth.
D) more buyers than sellers.
E) more sellers than buyers.

Question

Quizplus · Accepted Answer

Internal efficiency refers to the ease and cost-effectiveness of trading within the market. Minimal transaction costs, such as low fees and easy access to information, are key indicators of internal efficiency. Price continuity (A) and depth (C) are related to external efficiency, which focuses on the accuracy of market prices in reflecting all available information. The number of buyers or sellers (D,E) does not necessarily indicate internal efficiency.

When a Market Is Internally Efficient, It Means That the Market