Once market inefficiencies become known, they will be exploited by traders until they disappear.

Question

Quizplus · Accepted Answer

This is known as the efficient market hypothesis, which suggests that any market inefficiencies will be quickly exploited by traders, resulting in prices reflecting all available information. However, some argue that certain inefficiencies can persist due to factors such as information asymmetry or behavioral biases.

Once Market Inefficiencies Become Known, They Will Be Exploited by Traders