Which of the following least likely contributes to market efficiency? Low transaction costs A large number of active market participants Rapid and low-cost access to information Limits to trading All of the above contribute to market efficiency.

Market efficiency is the ability of markets to process the information quickly and generate the…

Answered: Which of the following least likely…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 2DQ: What are the features of a perfectly competitive market? Give two examples of competitive markets....

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Which of the following least likely contributes to market efficiency?

Low transaction costs
A large number of active market participants
Rapid and low-cost access to information
Limits to trading
All of the above contribute to market efficiency.

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

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