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Practice Question 6 The theory of market efficiency requires which of the following assumptions? Negligible transaction...

Practice Question 6

The theory of market efficiency requires which of the following assumptions?

Negligible transaction costs.

A large number of actively traded securities.

Widely available information that is quickly translated into share price adjustments.

All of the above.

Question 11

In an efficient market,

a.  security prices react quickly to new information.
b.  security analysts will not enable investors to realize superior returns consistently.
c.  one cannot make money.
d.  a and b are both correct.
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Answer #1

1.

Option C is corrrect

All of the above.

2.

Option D is correct

security prices react quickly to new information.

security analysts will not enable investors to realize superior returns consistently.

In efficient markets, generating alpha is not possible

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