A market for securities in which those firms with the most promising investment opportunities have access to the needed funds is known as a(an) ____ efficient market.

Question

Quizplus · Accepted Answer

An allocationally efficient market is one where funds are allocated to firms with the most promising investment opportunities. This ensures that resources are being allocated in the most efficient manner possible. Internally efficient markets refer to markets where securities are priced correctly based on all available information, externally efficient markets refer to markets where securities are priced correctly based on all public information, and globally efficient markets refer to markets where securities are priced correctly based on all information available anywhere in the world. None of these options specifically address the allocation of funds to the most promising investment opportunities.

A Market for Securities in Which Those Firms with the Most