A significant difference between a stock's market value and its intrinsic value indicates that financial markets are basically inefficient.

Question

Quizplus · Accepted Answer

The difference between a stock's market value and its intrinsic value does not necessarily indicate market inefficiency. It may reflect the market's current perception, information asymmetry, or speculative elements, rather than a fundamental inefficiency in financial markets. Market efficiency is a broader concept that involves the ability of prices to fully reflect all available information.

A Significant Difference Between a Stock's Market Value and Its