CFA Practice Question
Which of the following characteristics of a well functioning securities market has been correctly described?
A. External efficiency implies markets must react to information quickly.
B. Liquidity implies that buyers have cash to pay for the assets they purchase.
C. Continuity means the markets are open continuously during trading hours
Explanation: Liquidity means assets can be bought and sold easily. Continuity means that prices do not change substantially from one transaction to the next, unless significant new information arrives.
User Contributed Comments 1
| User | Comment |
|---|---|
| jjhigdon | I thought A described Informational Efficiency... |