A characteristic of an efficient market is
A) significant trends in security returns
B) prices which are slow to adjust to new information
C) randomness in security returns
D) the past pattern predicts the future pattern of prices

Question

Quizplus · Accepted Answer

Randomness in security returns is a characteristic of an efficient market, meaning that prices are unpredictable and reflect all available information. The other choices suggest inefficiency in the market, such as significant trends in security returns, slow price adjustments, and a predictable past pattern.

A Characteristic of an Efficient Market Is