A market in which stock prices fully reflect all information that is available to investors is called

Question

Quizplus · Accepted Answer

An efficient market is one in which all available information is fully reflected in the prices of assets, such as stocks. This means that investors cannot consistently generate returns that are higher than the overall market average, without taking on additional risk. In contrast, an inefficient market would allow skilled investors to earn abnormal profits by exploiting mispricings or other market inefficiencies. The other answer choices (A, C, and D) do not accurately describe an efficient market.

A Market in Which Stock Prices Fully Reflect All Information