Asked by Carissa Gulli on Jun 29, 2024
Verified
An efficient market is a market in which
A) everyone always gets what they want.
B) profit opportunities are eliminated almost instantaneously.
C) profits are always very high and persistent.
D) opportunity costs are zero.
Efficient Market
A market in which asset prices fully reflect all available information.
Profit Opportunities
Situations or circumstances where businesses can generate earnings that are above the normal expected returns.
Opportunity Costs
The value of the next best alternative that is foregone when a particular decision is made.
- Comprehend the central tenets of economics: the concept of opportunity cost, marginalism, and the effectiveness of markets.
Verified Answer
MC
Maggie ConnorJul 01, 2024
Final Answer :
B
Explanation :
In an efficient market, prices reflect all available information, so profit opportunities from trading on such information are quickly exploited and eliminated, leading to prices that accurately reflect the value of securities almost instantaneously.
Learning Objectives
- Comprehend the central tenets of economics: the concept of opportunity cost, marginalism, and the effectiveness of markets.