- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 38. Market Efficiency
- Subject 1. The Concept of Market Efficiency
CFA Practice Question
Which of the following assumptions imply an informationally efficient market?
II. The timing of one news announcement is generally dependent on that of other news announcements.
III. Security prices adjust rapidly to reflect new information.
IV. A risk-free asset exists, and investors can borrow and lend unlimited amounts at the risk-free rate.
I. Many profit-maximizing participants, each acting independently of the others, analyze and value securities.
II. The timing of one news announcement is generally dependent on that of other news announcements.
III. Security prices adjust rapidly to reflect new information.
IV. A risk-free asset exists, and investors can borrow and lend unlimited amounts at the risk-free rate.
A. I and III only
B. II and IV only
C. I, II, III, and IV
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