Question

In an efficient market, anomalies may result from (a) high stock returns (b) low market returns...

In an efficient market, anomalies may result from

(a) high stock returns

(b) low market returns

(c) inappropriate risk adjustment

(d) market disequilibrium

(e) none of the above

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Answer #1
an efficient market is which taken in account the inforamation affecting the prices of securities and changes its prices so efficiently that the no person can earn abnormal profit
from the market.
in an efficient market , anomalies may result from
answer is C.
(a) wrong . Due to to high stock retur efficient market will raise. It is the outcome
b) wrong. Due to low market ruturns, efficient market will down, it Is the outcome.
c) correct. If the market does not correctly adjust the risk factor, the prices will not reflect correctly
and anomalies may result. An investor can earn abnormal or loss abnormal.
d) wrong. An efficient market is always at market equilibrium.
e) none of the above.
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