CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

ALL of the following are requirements of an efficient market EXCEPT ______.

I. continuous analysis
II. predictable arrival of news and information
III. swift price adjustment to new information
IV. low barriers to transactions and arbitrage
A. I and II
B. II only
C. III and IV
Explanation: New information should arrive randomly, otherwise markets would not reflect all available information and informed traders would exploit uninformed traders or investors.

User Contributed Comments 4

User Comment
campitos69 Can someone comment on the first statement please?. I mean, I know answer is right, but I don't know what they meant by continuous analysis as a requirement of an efficient market. Thanks
larc4eva I think, reflecting the explanation above, analyzing market should be continued due to randomly arriving new information and as market changes continuously. This was just my opinion. I also would like A commented by someone who is 100% sure about.
Fliper333 In my point of view, market efficiency comes from analysis. If decisions are made without any analysis it will be irrational decision - and hence inefficient market.
farhan92 i would have got this right if EXCEPT was written in bold,red and highlighted -.-
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