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True or False? Asymmetric information increases the efficiency of financial markets. Select one:
True or False?
Solution
False
Asymmetric information is there when some people has more information and some people has
less information. In other words, it occurs when there is no perfect flow of information. When
there is imperfect flow of information, people with more information earn abnormal returns and
people with little or less information, generally loses their money. So this leads to inefficiency of
market.

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