An efficient capital market is best defined as a market in which security prices reflect which one of the following?
a. Current inflation
b. A risk premium
c. All available information
d. The historical arithmetic rate of return
e. The historical geometric rate of return

Respuesta :

An efficient capital market is best defined as a market in the security prices reflect is all available information. The correct option is (C).

What do you mean by the efficient capital market?

A popular definition of an efficient capital market is one in which the prices of securities accurately represent all pertinent information regarding the underlying value of the securities.

A healthy, effective market is crucial because it encourages businesses to list their shares on stock exchanges.

In order to encourage investors to buy firm shares, it is therefore important to work toward a capital market that is efficient and offers good turnover opportunities.

Therefore, an efficient capital market is best defined as a market in the security prices reflect is all available information.

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