Question

You want to save for your retirement. What should you do if markets are largely efficient?...

You want to save for your retirement. What should you do if markets are largely efficient? What should you do if they are not efficient?

Homework Answers

Answer #1

An efficient market indicates that share prices are priced correctly based on all available and current information.

An inefficient market is just opposite, where share prices may be undervalued or overvalued and don’t give exact picture.

An investor must ensure that his/her investment is in accurate share price, because it makes easy understanding the future – getting deprived would become the minimum. Therefore, I should invest in an efficient market for retirement benefits.

I should not invest in an inefficient market in anyway.

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