Behaviorists point out that even if market prices are ________, there may be ________.
A) distorted; limited arbitrage opportunities
B) distorted; fundamental efficiency
C) allocationally efficient; limitless arbitrage opportunities
D) distorted; allocational efficiency

Question

Quizplus · Accepted Answer

Behaviorists believe that market prices can be distorted due to irrational behavior of investors. However, they also acknowledge that arbitrage opportunities may be limited due to factors such as transaction costs and informational asymmetry. Therefore, even if prices are distorted, there may be limitations in exploiting these inefficiencies through arbitrage.

Behaviorists Point Out That Even If Market Prices Are ________