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Which one of the following statements is most likely correct regarding efficient markets?Select one:a.It requires a large number of mutually exclusive securities.b.Prices adjust rapidly to new information.c.Investors expect price changes to be controlled.d.Investors make rational decisions that determine prices.

Question

Which one of the following statements is most likely correct regarding efficient markets?Select one:a.It requires a large number of mutually exclusive securities.b.Prices adjust rapidly to new information.c.Investors expect price changes to be controlled.d.Investors make rational decisions that determine prices.

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Solution

The most likely correct statement regarding efficient markets is: b. Prices adjust rapidly to new information.

In an efficient market, all available information is already incorporated into the prices of securities. Therefore, when new information becomes available, prices adjust quickly to reflect this new information. This is a key characteristic of an efficient market. The other options do not accurately describe the characteristics of an efficient market.

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