Asked by Sonia Salomoni on Jul 02, 2024
An efficient capital market is one in which:
A) Brokerage commissions are zero.
B) Taxes are irrelevant.
C) Securities always offer a positive rate of return to investors.
D) Security prices are guaranteed (by the Ontario Securities Commission) to be fair.
E) Security prices reflect available information.
Efficient Capital Market
A market where all relevant information is fully and immediately reflected in securities prices, ensuring that securities are always fairly priced.
Security Prices
The market value or price at which securities, such as stocks or bonds, are bought and sold.
Available Information
Data or facts that are accessible to the public and can be used to make educated decisions or analyses.
- Familiarize with the Efficient Markets Hypothesis (EMH) and its significance for pricing in the capital markets.
Learning Objectives
- Familiarize with the Efficient Markets Hypothesis (EMH) and its significance for pricing in the capital markets.
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