Question

Among the important characteristics of market efficiency is (are) that: I. There are no arbitrage opportunities. II. Security prices react quickly to new information. III. Active trading strategies will not consistently outperform passive strategies.
a. I only
b. II only
c. I and III only
d. I, II and III

Answer 1

Answer:

D

Explanation:

Among the important characteristics of market efficiency is (are) that:

1. There are no arbitrage opportunities;

2. Security prices react quickly to new information; and

3. Active trading strategies will not consistently outperform passive strategies.