In a well-functioning securities market:
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A) |
major news announcements usually coincide. |
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B) |
there are many buyers and sellers willing to trade at below market price and participants have timely information on the price and volume of past transactions. |
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C) |
portfolio managers assist clients with diversifying globally to reduce systematic risk. |
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D) |
a limit sell order and a stop sell order are both placed above the current market price. |
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The correct answer was B) there are many buyers and sellers willing to trade at below market price and participants have timely information on the price and volume of past transactions.
The other statements are false. A limit sell order is placed above the market price, but a stop sell order is placed below the current market price. In an efficient market, portfolio managers assist clients with diversifying globally to reduce unsystematic risk. Systematic risk is not diversifiable. One assumption of efficient markets is that the timing of a news announcement is independent of the timing of other news announcements.
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发表于 2006-4-17 10:55
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