Canadian Securities Course (CSC) Practice Exam · Question
What is the primary characteristic of an efficient market?
In an efficient market, asset prices fully and instantly reflect all available information. This implies that it's impossible to consistently 'beat the market'
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Question: What is the primary characteristic of an efficient market?
Answer options: ✅ Prices always reflect all available information.
- Investors can consistently earn abnormal returns.
- Transactions always occur without any costs.
- Only institutional investors can profit from trading.
Correct answer: Prices always reflect all available information.
Explanation: In an efficient market, asset prices fully and instantly reflect all available information. This implies that it's impossible to consistently 'beat the market' through public information.
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