Which of the following statements with respect to an efficient capital market is incorrect?
A) There are no underpriced securities in an efficient market when using publicly available information.
B) A relatively inactive approach to trading securities is an appropriate investment strategy for most investors.
C) In an efficient market, changing an accounting method will cause the company's market price to change.
D) An efficient capital market is one in which market prices fully reflect all information available to the public.

Question

Quizplus · Accepted Answer

In an efficient market, changing an accounting method should not affect the company's market price because the market already reflects all available information, including the implications of accounting changes.

Which of the Following Statements with Respect to an Efficient