CFA Practice Question

CFA Practice Question

Stock markets are more likely to be efficient if:
A. arbitrageurs have limited access to funds.
B. there are market segments that will invest only in bonds and never in stocks due to the higher risk.
C. a large number of traders analyze securities and makes trades based on their analysis
Explanation: Fewer investors (market segments) will harm market efficiency. Arbitrageurs actions help rather than harm market efficiency.

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