- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 38. Market Efficiency
- Subject 1. The Concept of Market Efficiency
CFA Practice Question
Which of the following is least likely included in the assumptions of an informationally efficient securities market?
A. A large number of profit-maximizing participants analyze and value securities.
B. New information regarding securities comes to the market in a predictable manner.
C. Profit-maximizing investors adjust security prices rapidly to reflect the effect of new information.
Explanation: The assumption that the new information comes to the market in a predictable manner is an inaccurate statement. The correct assumption is that the new information comes to the market in a random fashion.
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