Question

Which one of the following best describes the current understanding of market efficiency?
A. The market tends to overreact to new information in a manner which can be used to earn abnormal returns.
B. Markets under-react to unanticipated events in a manner which can be used to earn excess returns.
C. The market appears to be highly inefficient.
D. Short-term market movements are difficult, if not impossible, to predict accurately.
E. Markets tend to react slowly to unanticipated announcements.

Answer

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