Market efficiency says:
A)managers cannot boost stock prices through creative accounting.
B)managers may profitably speculate in foreign currency.
C)a good financial manager can time stock sales.
D)prices may not reflect underlying value.
E)None of the above.

Question

Quizplus · Accepted Answer

Market efficiency suggests that prices in the market reflect all available information and that managers cannot manipulate stock prices through accounting tricks, as this would be reflected in the price. Therefore, a good financial manager cannot time stock sales, speculate in foreign currency, or believe that prices do not reflect underlying value, as these actions go against the concept of market efficiency.

Market Efficiency Says