Reading 57: Market Efficiency-LOS a 习题精选 2011, efficiency, investment, efficient, including

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Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 57: Market Efficiency

LOS a: Discuss market efficiency and related concepts, including their importance to investment practitioners.

 

 

An efficient capital market:

A) fully reflects all of the information currently available about a given security, excluding risk.

B) does not fully reflect all of the information currently available about a given security, including risk.

C) fully reflects all of the information currently available about a given security, including risk.

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An efficient capital market fully reflects all of the information currently available about a given security, including risk.

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The implication of efficient capital markets and a lack of superior analysts have led to the introduction of:

A) index funds.

B) balanced funds.

C) futures options.

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An index fund is designed to duplicate the composition of a specific index series or market segment. There is a strong argument suggesting that portfolio managers cannot beat the market after fees, therefore an index fund should be used to try to match the market.