In the role of the Phillippines Stock Exchange, which of the following assures that no investor will have an undue advantage over another? a.all of them b.protecting the interest of the investing public c.developing and maintaining an efficient market d.efficient e.fair

In the role of the Phillippines Stock Exchange, which of the following assures that no investor will have an undue advantage over another? a.all of them b.protecting the interest of the investing public c.developing and maintaining an efficient market d.efficient e.fair

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 3MCQ

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Concept explainers

Functions of Financial Institutions

Financial institutions are businesses that are formed to deal with financial and monetary transactions. These organizations primarily accept deposits, advance loans, make investments, and provide foreign exchange services. Financial institutions include, but are not limited to, banks, insurance companies, trust companies, brokerage firms, and investment bankers. Because financial institutions play such an important role in the economy in terms of monetary transactions, regulating their activities has become a requirement for governmental authorities. As a result, the government creates a multitude of laws and regulations to oversee the activities of financial institutions.

Question

In the role of the Phillippines Stock Exchange, which of the following assures that no investor will have an undue advantage over another?

a.all of them

b.protecting the interest of the investing public

c.developing and maintaining an efficient market

d.efficient

e.fair

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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