Question

Which one of the following statements is correct concerning market efficiency? Group of answer choices If...

Which one of the following statements is correct concerning market efficiency?

Group of answer choices

If the market is efficient the price instantaneously adjusts to new information

In an efficient market, some market participants will have an advantage over others

Real asset markets are more efficient than financial markets.

If a market is efficient, arbitrage opportunities should be common.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Ans If the market is efficient the price instantaneously adjusts to new information

Also, a firm will generally receive a fair price when it issues new shares of a stock.

Add a comment
Know the answer?
Add Answer to:
Which one of the following statements is correct concerning market efficiency? Group of answer choices If...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Which of the following statements is (are) false? Group of answer choices If the market portfolio...

    Which of the following statements is (are) false? Group of answer choices If the market portfolio is the tangency portfolio, then the relationship between risk and return is best described as linear If two mean-variance efficient portfolios are combined, the result is a mean-variance efficient portfolio                                                                                                                                                 All mean-variance efficient portfolios are combinations of the market portfolio and the risk-free asset Market efficiency indicates a non-quadratic relationship between risk and return

  • Which of the following statements is CORRECT? Group of answer choices One advantage of dividends over...

    Which of the following statements is CORRECT? Group of answer choices One advantage of dividends over share repurchases is that dividends provide financial managers with more flexibility. Despite several advantages of share repurchases, dividends remain the dominant form of shareholder payout. After announcing a share repurchase program, a firm is not required to repurchase any of the shares it intended to buy back. B and C are correct. All of the above are correct.

  • Which of the following statements regarding asset price bubbles is correct? Select one answer and give...

    Which of the following statements regarding asset price bubbles is correct? Select one answer and give an explanation for each option: a) Some economists believe that bubbles do not exist. b) According to the efficient market hypothesis, bubbles occur when the market misprices the value of an asset. c) The market can easily know that it is in a bubble by comparing the market price with the fundamental value of the asset. d) For a bubble to occur, market participants...

  • Please correctly answer all parts of question 7 with the answer choices provided. 7. Efficient markets...

    Please correctly answer all parts of question 7 with the answer choices provided. 7. Efficient markets hypothesis Aa Aa he concept of market efficiency underpins almost all financial theory and decision models. When financial markets are efficient, the price of a security-such as a share of a particular corporation's common stock-should be the present value estimate of the firm's expected cash flows discounted by its appropriate rate of equal to lled the intrinsic value of the stock) more than Almost...

  • Correctly answer each part of question 7 with answer choices provided. 7. Efficient markets hypothesis Aa...

    Correctly answer each part of question 7 with answer choices provided. 7. Efficient markets hypothesis Aa Aa True or False: The efficient markets hypothesis holds only if all investors are rational. O False O True Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) returns on their investments. If the markets are efficient, they will...

  • /Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can...

    /Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can be used to arbitrage and achieve excess return. b) Derivatives have high real value certainty. c) Derivatives are not always more liquid than their underlying basic securities.X d) Derivatives are designed to provide higher returns as compensation to high risk

  • Which of the following statements is CORRECT? Group of answer choices -The CAPM has been thoroughly...

    Which of the following statements is CORRECT? Group of answer choices -The CAPM has been thoroughly tested, and the theory has been confirmed beyond any reasonable doubt. -A graph of the SML as applied to individual stocks would show required rates of return on the vertical axis and standard deviations of returns on the horizontal axis. -If investors become more risk averse, then (1) the slope of the SML would increase and (2) the required rate of return on low-beta...

  • Regarding market efficiency, which of the following is true? a.) Equities markets are perfectly efficient. There...

    Regarding market efficiency, which of the following is true? a.) Equities markets are perfectly efficient. There has never been an opportunity to make an abnormal profit within the major equities markets. b.) Equities markets are very efficient. In the past, profit-taking opportunities have occasionally occurred, and some have been well-documented in finance literature. However, such anomalies are quite difficult to spot except in retrospect. c.) Equities markets are only somewhat efficient, and abnormally profitable strategies can usually be uncovered given...

  • 1. Regulations that offer imperfect answers Group of answer choices Reflect the realistic choices that society...

    1. Regulations that offer imperfect answers Group of answer choices Reflect the realistic choices that society must make between imperfect markets and imperfect government intervention. Are options that should never be implemented. Will always have costs greater than their benefits. Are not consistent with utility maximization in the real world. 2. An unregulated natural monopoly is most likely to Group of answer choices Produce where marginal cost equals price. Charge a lower price than if the same product were produced...

  • Find below several statements about financial markets. Classify them with respect to market-efficiency. Choose the strongest...

    Find below several statements about financial markets. Classify them with respect to market-efficiency. Choose the strongest form of efficiency prevailing from the set of the following four options: • Markets are inefficient • Weak efficiency • Semi-strong efficiency • Strong efficiency Provide a brief rationale for your decision. a) New information about a stock is instantaneously incorporated in the stock price. b) A friend working in a computer company gives you the confidential information that they will release a new...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT