Which of the following statements is TRUE?
I. For every transaction in the stock market there is a buyer and a seller.
II. At any point in time, the price of a stock tends to reflect all available public information about the company's future prospects.
III. A revolutionary cancer treatment pill will be released next year. An investor will get rich by buying stock in that company now.
A) I and II only
B) III only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Statement I is true because in every transaction there must be a buyer and a seller. 
Statement II is also true because stock prices reflect all available public information which includes future prospects. 
However, statement III is false because the certainty of the release of the cancer treatment pill and its subsequent success is uncertain and not based on the information available in the market. Therefore, the idea that an investor can get rich by buying the stock is speculative and not based on facts.

Which of the Following Statements Is TRUE