An efficient capital market is best defined as a market in which security prices reflect which one of the following?

Question

Quizplus · Accepted Answer

An efficient capital market is one where security prices fully reflect all available information. This means that investors cannot make abnormal profits by simply trading on publicly available information, as it has already been incorporated into the price of the security. In an efficient market, security prices move quickly to reflect any new information that may impact the entity's financial health, prospects, or business environment.

An Efficient Capital Market Is Best Defined as a Market