Testing for market efficiency is often conducted using _____ where it can be seen just how fast security prices actually react to the release of information.
A) a pattern search
B) event studies
C) the investment record of professional investors.
D) the up-tick rule

Question

Quizplus · Accepted Answer

Event studies are commonly used to test for market efficiency by examining how quickly and accurately stock prices respond to the release of new information. The study looks at abnormal returns around a specific event, such as an earnings announcement or news about a merger, to see if the market quickly and efficiently incorporates the new information into prices.

Testing for Market Efficiency Is Often Conducted Using _____ Where