3. Assume that investors search for information about asset prices to determine if they are over- or

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3. Assume that investors search for information about asset prices to determine if they are over- or undervalued. While searching for such mispriced stocks, they uncover information and quickly act on it by buying or selling. What would be the implication for the market’s functioning if competition for such information were fierce and continuous? (Hint: Be sure to read Box 9.3.)

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Muhammad Salman Alvi

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