In an efficient market,
A) security prices react quickly to new information.
B) security prices are seldom far above or below their justified levels.
C) security analysis will not enable investors to realize superior returns consistently.
D) one cannot make money.
E) security prices react quickly to new information, security prices are seldom far above or below their justified levels, and security analysis will not enable investors to realize superior returns consistently.

Question

Quizplus · Accepted Answer

In an efficient market, prices of securities quickly adjust to new information, ensuring they are always close to their true value, making it impossible for investors to consistently achieve higher returns through security analysis. This concept is encapsulated in choice E, which combines A, B, and C, all of which are characteristics of an efficient market.

In an Efficient Market