The paradox of efficient markets is that
A)even though markets are efficient overall,there are pockets of inefficiency.
B)news about anomalies makes the market less efficient.
C)investors attempting to uncover and use information about security prices help make the market more efficient (i.e.,an "efficient amount of inefficiency")
D)investors make the market less efficient.

Question

Quizplus · Accepted Answer

The paradox of efficient markets is resolved by recognizing that investors attempting to uncover and use information about security prices help make the market more efficient, but this process leads to an "efficient amount of inefficiency." Thus, while there may be some pockets of inefficiency in the market, overall, it is efficient due to investors' efforts to exploit any inefficiencies.

The Paradox of Efficient Markets Is That