- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 3. Market Efficiency
- Subject 1. The Concept of Market Efficiency
CFA Practice Question
In an efficient market, security prices ______
B. react only to unexpected information.
C. are equal to their intrinsic value.
A. reflect all past, present, and future information.
B. react only to unexpected information.
C. are equal to their intrinsic value.
Correct Answer: B
C: They should reflect, but are not necessarily exactly equal to, their intrinsic value.
A: Security prices reflect all past and present information.
C: They should reflect, but are not necessarily exactly equal to, their intrinsic value.
User Contributed Comments 1
| User | Comment |
|---|---|
| CFAJ | they react to expected information also, when they information becomes expected |